Spitzer Charges 8 in Mortgage Fraud Scheme
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Attorney General Eliot Spitzer has charged eight people with a mortgage fraud scheme that he said defrauded banks of millions of dollars and had the potential to harm the housing market.
The eight defendants included mortgage brokers and attorneys. They are alleged to have submitted fraudulent mortgage applications that overvalued properties, allowing them to receive loans in amounts larger than what was needed to purchase the properties.
Seven of the defendants have been arrested and were brought to state court in Brooklyn to be arraigned yesterday, Mr. Spitzer said at a press conference with the New York State banking superintendent, Diana Taylor, in his Lower Manhattan office.
The falsified mortgage applications were filed for properties in Brooklyn, Queens, and Suffolk County, Mr. Spitzer said. While he said an exact dollar figure of what was stolen is not available, he estimated that each application might have netted an illicit profit of between $100,000 and $200,000. The scheme began in 2001 and involved hundreds of transactions, Mr. Spitzer said.
The defendants, who are charged with conducting a criminal enterprise, face 25-year sentences if convicted. They include: Louis Sandella, 43; Michael Sandella, 41; Danielle Moss, 36; Kim Moss Fontanez, 33; Geraldine Moss, 60; Gary Shaw, 68, and Ida D’Angelo, 38. One defendant, Andreas Perdikos, 41, has not yet been arrested.
According to the indictment, the scheme involved the use of straw purchasers who, on behalf of the defendants, allegedly submitted inflated mortgage applications. When the mortgage went unpaid and the lending banks foreclosed on the properties, the defendants would be left with a portion of the loan money and the straw purchasers would be left with a few thousand dollars for their trouble, Mr. Spitzer said.
In all, dozens of straw purchasers were involved, eight of whom have al ready pleaded guilty, Mr. Spitzer said.
Although Mr. Spitzer said banks were the primary victims, he said the effect of the fraud might have been widespread. “The scams carried out by these defendants not only harmed targeted individuals and lending institutions, but had the potential to undermine the housing market in the neighborhoods where they practiced their scheme, “he said in a statement.
Mr. Spitzer is also requesting that the defendants forfeit $8.3 million taken from a number of the transactions.
