Three criminal cases in New York each involve attorneys accused of mortgage-related crimes. One of the cases involved at total of 26 people in a massive subprime mortgage fraud scheme.
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Nassau County District Attorney Kathleen Rice has charged two lawyers of stealing nearly $1 million in two separate cases out of Long Island.
Attorney Barry Chasky, 54, of Point Lookout, N.Y., is accused of raiding escrow accounts of nearly $900,000 from a title company. And lawyer Joseph Corrado, 48, of Pleasantville, N.Y., faces charges he stole $31,000 from a client he represented in a foreclosure.”Attorneys have more than just a professional responsibility to represent their clients’ interests,” Rice said in a statement. “We will be very aggressive in going after professionals violating this trust and preying upon the vulnerabilities of their clients.” A routine audit exposed Chasky’s alleged embezzlement, Rice said. Chasky owns and operates Triad Abstract Co., an agent of First American Title Insurance Co. In December, First American began an audit of Triad’s work. But something was peculiar, Rice said.
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Chasky had not recorded many documents.
“This is a serious violation of not only the agency contracts, but also Triad’s and Mr. Chasky’s fiduciary duty to the insured clients,” Rice said.
Knowing the auditors next move was to review Triad’s book and bank records, Chasky confessed that he had taken money from Triad’s accounts. Rice said.
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Chasky stole the money through a series of checks written in various amounts to a friend. Amounts ranged from $30,000 to $100,000 for a total loss to First American of $800,000, Rice said. Corrado was hired in January 2005 to help negotiate a loan modification for a client who was facing foreclosure after not paying his mortgage three years. Rice said the homeowner gave Corrado $35,000 to hold in escrow during the negotiations. Bank One eventually foreclosed on the home and sold it at an auction last summer. Corrado did little to help the homeowner keep the property, only filing a notice of appeal during the process, Rice said. But worse, he allegedly “pocketed the money”, she said. Corrado did return $4,000, but his client lost $31,000, she said. Both lawyers have been charged with grand larceny.
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In Manhattan federal prosecutors say Brooklyn lawyer Alexander Kaplan took part in a subprime mortgage fraud scheme that involved 26 people and high-priced New York City apartments.
According to the U.S. Attorney’s office in New York, Kaplan and 26 others participated in a “wide-ranging scheme to commit mortgage fraud” by submitting loan applications containing “false information and material omissions” to subprime lenders.
Prosecutors said Kaplan, who represented buyers and lenders in deals to buy the apartments, was involved in the fraud conspiracy.
Lenders were given false information about the intent of the buyers; for example, they were told the buyers intended to live in some of the apartments. In other instances, lenders were told that the apartments were investment properties that rented for $6,500 a month. That was also a lie, prosecutors said.
“In addition, the sellers and buyers were all related in some respect — either by blood or by marriage — to each other,” the U.S. Attorney’s office said in a statement. “None of the subprime lenders were informed of the fact that the sales was not an ‘arms length’ transaction.”
Kaplan handled many of the documents and loan applications used to dupe the lenders, prosecutors said. If convicted, he faces up to 30 years in prison and a fine of $250,000.
