A second person has pleaded guilty in a case where a lender sold Fannie Mae $136 million in mortgages that it didn’t own.
Leroy Hayden pled guilty to one count of wire fraud conspiracy, the U.S. Department of Justice announced.
Hayden was the servicing manager at U.S. Mortgage — which collapsed in February 2009. He worked there from 2004 until just before it folded.
According to the government, Hayden conspired with U.S. Mortgage’s president and controlling shareholder Michael J. McGrath Jr. to fraudulently sell hundreds of mortgages to Fannie Mae even though the loans belonged to various credit unions.
McGrath, who pled guilty to one count of mail and wire fraud conspiracy in mid-2009, used the $136 million for personal expenses, the company’s operational expenses and the purchase of 1 million Fannie Mae shares .
He faces sentencing on July 6.
Hayden allegedly provided the credit unions with bogus reports indicating that the sold loans were still in the credit unions’ portfolios, the news release said. Hayden also admitted to modifying data in U.S. Mortgage’s servicing system.
Hayden faces up to five years and is scheduled for sentencing on July 27.
United States of America v. Michael J. McGrath Jr.
Criminal No. 09 (U.S. District Court District of New Jersey).
