Feds: Commack man pleads guilty in $4.7 million mortgage fraud scheme

A Commack man accused of stealing $4.7 million from lenders pleaded guilty to bank fraud for his role in a mortgage fraud scheme Tuesday in federal court in Brooklyn.

Brent Kaufman, 50, was an unlicensed mortgage broker who assisted clients in Queens and on Long Island refinance their homes, prosecutors said in court papers. Kaufman diverted money between 2016 and 2019 that was supposed to be used to pay off old mortgages at closing to personal accounts. He used the funds for his personal use.

The scheme left Kaufman’s clients in financial ruin, holding two mortgages while facing the threat of foreclosure. Some of the clients’ homes were foreclosed on as a result of Kaufman’s scam, prosecutors said.

"With today’s guilty plea, Kaufman admits to stealing millions of dollars in a brazen mortgage fraud scheme that defrauded numerous lenders and left his homeowner-clients in danger of losing their homes to foreclosure," Acting U.S. Attorney Jacquelyn Kasulis said. "This Office is committed to prosecuting defendants like Kaufman who are driven by greed to abuse the trust of innocent homeowners."

Kaufman is scheduled to be sentenced on Jan. 26. He faces up to 30 years in prison as well as forfeiture and a fine of up to $1 million.

"He has acknowledged his criminal conduct and is looking forward to putting this chapter in his life behind him, Kaufman’s attorney Nicholas Kaizer of Manhattan said.

According to the court papers, funds from new mortgages issued by the lenders should have been wired to financial institutions that held prior mortgages in order to retire the old lien on the home. Kaufman instead provided false routing information to the lenders, who sent the money from the new mortgages to accounts controlled by the defendant.

Kaufman used some of the money to make payments to the old mortgages or to retire the old mortgages in order to avoid detection, prosecutors said. He stopped making payments on other mortgages, prompting lenders to begin foreclosure proceedings.

"Not only did Kaufman steal his victims’ money, but he also violated their trust, leaving them financially vulnerable and at risk of significant financial complications," said Michael Driscoll, Assistant Director-in-Charge of the FBI’s New York office.

The lenders suffered a net loss of nearly $2.5 million, prosecutors said.