Millions swindled on Westchester, Dutchess homes
Photo credit: iStock | Four attorneys admitted they swindled millions in a wide-ranging mortgage fraud scheme involving more than 100 homes in Westchester and Dutchess counties, federal prosecutors said Thursday. The scheme lasted nearly five years and netted $66 million for its conspirators until the collapse of the real estate market led to increased scrutiny and an investigation, the office of U.S. Attorney Preet Bharara said. (June 7, 2012)
Four attorneys admitted they swindled millions in a wide-ranging mortgage fraud scheme involving more than 100 homes in Westchester and Dutchess counties, federal prosecutors said Thursday.
The scheme lasted nearly five years and netted $66 million for its conspirators until the collapse of the real estate market led to increased scrutiny and an investigation, the office of U.S. Attorney Preet Bharara said.
With the help of brokers and "straw buyers" -- people who posed as legitimate home buyers -- the attorneys secured mortgage loans, prosecutors said, and kept the loan money, "typically totaling tens of thousands of dollars or more per transaction," according to a statement from Bharara's office.
The scheme involved more than 100 homes in Westchester and Dutchess counties as well as Long Island, documents show. Part of the scheme involved lying on loan applications, prosecutors said, so the straw buyers looked like trustworthy borrowers with good jobs who would live in the homes and make their payments.
Three attorneys pleaded guilty to fraud charges before U.S. District Judge Robert P. Patterson on Thursday, and one pleaded guilty on Wednesday.
Attorneys Jacquelyn Todaro, Neal Sultzer and Kevin Hymes -- also known as Kevin Hymowitz -- worked for First Class Equities, also known as Thunder Funding and TAT Mutual Capital. A fourth, Michael Schlussel, continued to work and present himself as an attorney although he had been disbarred and was not licensed to practice law, prosecutors said.
Hymes, 39, of Armonk; Todaro, 42, of Westbury; Sultzer, 61, of Plainview; and Schlussel, 50, of Merrick, each pleaded guilty to conspiracy to commit wire fraud and bank fraud.
The charges carry a maximum sentence of 30 years in prison. Todaro, Hymes and Schlussel are scheduled for sentencing in September. Sultzer is scheduled for sentencing Oct. 1, according to prosecutors.
In addition to pleading guilty and potentially serving prison time, the four convicted attorneys agreed to forfeit the millions they took in -- $6.5 million for Todaro, $10.6 million for Sultzer, $5.8 million for Schlussel and $7.6 million for Hymes, Bharara's office said.
Five others have been convicted of participating in the scheme, and five remaining defendants are scheduled to go to trial July 2, Bharara's office said.
A message was left with an attorney who represents Schlussel. An Armonk phone listing for Hymowitz was disconnected. Attorneys for Todara and Sultzer could not be reached Thursday night.
