In a lawsuit filed earlier this month, DLJ Mortgage Capital Inc. claims it was defrauded on $50 million in loans. The bad loans were not uncovered for several years because the defendants allegedly made payments on the fake loans. The mortgage banker who served as the ringleader is currently in prison for bribing a U.S. congressman.
For a decade, Thomas T. Kontogiannis led an elaborate criminal scheme, according to a complaint filed last week in U.S. District Court for the Eastern District of New York. Several members of his family — including his wife, three daughters and two sons-in-law — were involved in the scheme and among more than two dozen defendants in the lawsuit.
Kontogiannis and his crew allegedly sold more than 95 mortgages for more than $50 million that were secured by fake real estate transactions to DLJ and other federally insured financial institutions over several years. The loans were included in pools of loans that included 1,800 legitimate loans for around $250 million.
But the mortgages were never recorded — making them worthless, court documents indicate. Some of the properties securing the fake loans were eventually sold by the defendants — netting a second round of proceeds.
Payments were made by the defendants on the bogus loans to conceal the fraudulent activity.
Of the more than 95 bad transactions, DLJ said 51 of the properties were subsequently sold legitimately and 17 are still owned by the defendants. On three of the transactions, the owner cannot be identified, while no public record exists on 24 of the properties.
The scheme unraveled in September 2007 when DLJ stopped receiving payments on the fraudulent loans.
The defendants operated through Coastal Capital Corp., which DLJ claims is a national mortgage lender. Coastal operated under multiple names.
In 2005, one of Kontogiannis’ companies, InterAmerican Mortgage Corp., was reportedly required to reimburse the U.S. Department of Housing and Urban Development for $2 million in connection with 19 fraudulent mortgages.
Among other defendants in DLJ’s case are Edgewater Development Inc., Group Kappa Corp. and Loring Estates LLC, which were the owners of record on many of the subject properties. Appraiser Steven Martini fabricated appraisals on properties that weren’t even constructed or only partially constructed.
Kontogiannis used his defendant companies Parkview Financial and InterAmerican to launder the funds. Transactions were closed through defendants Clear View Abstract LLC and Triumph Abstract LLC — which redirected loan proceeds to other defendants while grabbing a piece of the action themselves. Construction services on the fraudulent transactions were allegedly provided by Bond & Walsh Construction.
Two of the defendants, including Kontogiannis, have already testified, admitted or acknowledged the scam while under oath in separate criminal proceedings.
“They explained in detail how the … defendants brazenly prepared false loan applications in connection with purported purchases of residential property located in Queens and Brooklyn,” the complaint states. “These false applications were then approved and funded by their corporate funding vehicle.”
Kontogiannis pleaded guilty last year to laundering bribes paid to former U.S. Congressman Randall ‘Duke’ Cunningham and is currently serving an eight-year prison sentence, the suit says. He allegedly has a criminal record dating back 14 years.
DLJ Mortgage Capital Inc., Plaintiff, against Thomas Kontogiannis, Georgia Kontogiannis, Lisa DiPinto a/k/a Lisa Kontogiannis aka Lisa Pallatos, Annette Apergis a/k/a Annette Johnson, Chloe Kontogiannis, Adam DiPinto, Elias Apergis, John T. Michael, Michael A. Gallan, ESQ., Ted Doumazios, ESQ., Thomas F. Cusack, III, ESQ., Stephen P. Brown, ESQ., Steven A. Martini, Carmine Cuomo, Coastal Capital Corporation d/b/a Clearlight Mortgage, Edgewater Development Inc., Group kappa Corp., Loring Estates LLC, Parkview Financial Inc., d/b/a Parview Financial Inc., Clear View Abstract LLC, Triumph Abstract LLC, Bond & Walsh Construction Company, Interamerican Mortgage Corp., Corinne Michael, Block 13434 Development LLC, Conat Realty LLC, Plaza Real Estate Holding Inc. and Doe’s 1 through 100, inclusive, Defendants
Case. No. CV-08-4607, Nov. 13, 2008 (U.S. District Court, Eastern District of New York)
