Judge delays prison in bank fraud so convict can attend to business

The Long Island mortgage executive who pleaded guilty to bank fraud in the 2009 collapse of a $1-billion-a-year lender   has been granted a four-month delay in the start of his prison term.

Michael Ashley, 54, of Plainview, will start his prison term on Nov. 16 instead of July 16, as previously scheduled, after a federal judge agreed on Saturday to a request by Ashley's attorney for the delay.  

Ashley was in charge of Melville-based mortgage giant Lend America when it collapsed in 2009, causing more than $49 million in losses, court documents show.

Ashley's attorney, Kevin Keating, requested the delay to allow Ashley to eventually re-open his temporarily shuttered real estate business and stabilize it before he begins his prison term, Keating wrote in a letter to Judge Joseph Bianco on Thursday. The judge, formerly based at the federal court in Central Islip, now serves on the United States Court of Appeals for the Second Circuit but continues to preside over Ashley’s case.

In a note dated Saturday, Bianco wrote on the letter, "request granted." 

Keating declined to comment Monday.

Ashley now runs a real estate business, RebuildNY.com, also known as Realty Warehouse, that is shuttered due to the coronavirus pandemic but plans to resume operations “when legally permitted and feasible,” Keating wrote in his letter. 

Ashley’s business has 50 salaried employees who are currently collecting unemployment insurance, Keating wrote. Last year, Ashley testified that Realty Warehouse is involved in “buying and selling distressed property.”

Ashley's attorney said in the letter he had conferred with the prosecutor’s office, which agreed to the request for a delay. A spokesman for the U.S. Attorney for the Eastern District declined to comment.

Ashley was sentenced in July to three years in prison and ordered to pay $49 million in restitution and forfeit $800,000.  Bianco cited Ashley's cooperation in other prosecutions for the 3-year sentence. Federal law allows for prison sentences of up to 30 years for bank fraud.  The judge said last year he would allow Ashley to take up to a year to spend time with his mother while she was treated for cancer and to arrange for someone else to take over his business affairs.

Last year, Keating told the judge that Ashley has been operating his real estate business since 2013 and “it is run, obviously, fully lawfully.”

By Maura McDermott

maura.mcdermott@newsday.commauramcdermott

Maura McDermott covers education. Since joining Newsday in 2012, she also has worked on the investigations team and covered real estate and the business of health care.