A former attorney for the Federal Deposit Insurance Corp. will be spending hard time behind bars for defrauding Wells Fargo Bank, N.A.
Michelle M. Borzillo was a senior attorney at the FDIC until September 2014, according to an announcement from the Department of Justice.
In 2007, she purchased a residence in Nokesville, Virginia, for $850,000. The home was financed with
loans totaling $807,500 from Wells Fargo.
According to the Justice Department, she engineered the sale of the property through a short sale.
But Borzillo, 59, allegedly lied to Wells Fargo about the buyer.
Although she represented that the sale was an arm’s-length transaction to
someone with whom she had no close personal relationship — the buyer was actually her boyfriend who had lived with her for several years.
In addition, Borzillo
falsely certified that she was moving out of the property. She claimed that she was suffering a financial hardship due to a federal pay freeze in place at the time.
“In reality, as the defendant has admitted, she had no intention of moving out of the property, despite accepting $3,000 in relocation assistance in connection with a federal program designed to assist financially distressed short sellers,” the Justice Department’s statement said. “As a senior FDIC employee, the defendant also had not been subject to the federal pay freeze, and her base annual pay had steadily increased during the time she owned the home, to $230,000 at the time of the short sale.”
Wells Fargo reportedly suffered nearly $300,000 in losses as a result of the alleged crime.
Borzillo pleaded guilty on Nov. 17, 2015.
On
Friday, she was sentenced in U.S. District Court for the Eastern District of Virginia to a year in prison.
She was also ordered to pay $288,497 in restitution and forfeit the proceeds of her offense.
