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Former Lend America exec Michael Ashley gets sentence commuted by Trump

Michael Ashley, of defunct LI mortgage company Lend

Michael Ashley, of defunct LI mortgage company Lend America, leaves federal court in Central Islip in 2019. Ashley's sentence was commuted by President Donald Trump. Credit: Newsday Photo

In one of the last acts of his presidency, Donald Trump commuted the sentence of the Long Island man who pleaded guilty to bank fraud in the 2009 collapse of a $1-billion-a-year mortgage lender.

Michael Ashley, who was chief business strategist at Melville-based Lend America until its implosion, was one of 70 people whose commutations were announced by the White House on Wednesday, Trump’s last day as president. Another 73 people received presidential pardons, the White House said.

A woman who lost her Long Island home after taking out a loan from Lend America's parent company, Ideal Mortgage Bankers, called the commutation "a slap in the face to everybody that was harmed."

Ashley had been due to serve three years at a federal prison upstate starting in March, after receiving three delays in the start of his term.

The commutation eliminated Ashley's prison term but did not change the requirements for $49 million in restitution, $800,000 in forfeiture and a five-year term of supervised release.

Reached by phone Wednesday morning, Ashley said, "I have no comment."

Ashley's attorney, Kevin Keating, did not respond to requests for comment Wednesday.

In a statement, the White House said, "Notably, Mr. Ashley’s sentencing judge said, ‘I don’t have any concern that you are not truly remorseful. I know that you are a changed man.’ Since his conviction, Mr. Ashley has spent time caring for his ailing mother and paying his debt back to society."

Lend America’s collapse left $49 million in federally backed loans unfunded, according to the Government National Mortgage Association, or Ginnie Mae, which guaranteed the loans.

In the involuntary bankruptcy case of Lend America’s parent company Ideal Mortgage Bankers, U.S. Bankruptcy Judge Dorothy Eisenberg wrote in 2013 that Ashley "diverted over $50 million of [Lend America's parent company's] money for his own benefit, and/or for the benefit of his affiliated entities or relatives."

The trustee in the bankruptcy case wrote in court papers that some borrowers who refinanced their mortgages were "led to believe that...their first mortgages were being paid off," but instead the company allegedly failed to pay off the mortgages and "created false documents" that allowed the company to sell the unfunded mortgages to investors. Many of Lend America's borrowers ended up in foreclosure, court records show.

In an agreement with federal officials investigating Lend America's collapse, Ashley consented in 2010 to be barred from any involvement in federally backed loans.

The criminal case against Ashley dates to 2011, when Ashley pleaded guilty to bank fraud.

In 2019, Ashley was sentenced to three years in prison. He also was ordered to make restitution of $49 million, at a rate of 10% of his net monthly income during five years of supervised release.

Judge Joseph Bianco, formerly based at the federal court in Central Islip and now on the United States Court of Appeals for the Second Circuit, said at Ashley's sentencing that Ashley had already paid $800,000 in required forfeiture.

In court testimony in 2019, Keating said Ashley had rebuilt his life and had been operating a real estate business since 2013.

In a letter to the federal sentencing judge last year asking for a delay in the start of Ashley’s prison term, Keating wrote that Ashley was running a business called Rebuildny.com, also known as Realty Warehouse, which had shuttered due to the pandemic.

In testimony in 2019, Ashley said Realty Warehouse is involved in buying and selling distressed property.

Geneva Driver, who lost her home after taking out a loan from Ideal Mortgage Bankers, called the commutation a blow to her and others who suffered financially in the aftermath of the company’s collapse.

Driver, 54, said she refinanced the mortgage on her three-bedroom Brentwood home in 2004, to pay for a renovation that would let her open a home-based day care. Driver said her previous mortgage payments had been less than $900 a month. The Ideal Mortgage loan came with a 19% interest rate instead of the 11% to 12% rate she had been told she would get, and her payments jumped to an unaffordable $2,400, she said. Ideal Mortgage sued to foreclose in 2006.

"The people that are corrupt, they win again," said Driver, a mother of four who now lives in Maryland. "He did all that stuff and hurt a lot of families…and then for his sentence to be commuted, it’s just like a slap in the face to everybody that was harmed."

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