Three real estate attorneys are accused of stealing money from transactions they closed, with one helping 20 other defendants dupe lenders on loan files.
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Lawyer Shelly Ann Rivera ripped off nearly $1 million that her aunt made on real estate deals and the headed to Las Vegas with the dough. Rivera, 39, a lawyer from East Haven, Conn., has been sentenced to up to three years in prison after pleading guilty to grand larceny, according to the Westchester County District Attorney. Prosecutors say that between May 2005 and August 2006, Rivera, who practiced in White Plains, N.Y., represented an aunt in the sale of several pieces of real estate. After the aunt sold a condo in The Bronx, she gave Rivera $480,000. Rivera received another $522,248 after the aunt sold a house in Orange County, N.Y. Rivera was to hold the money in a trust so her aunt could invest in other properties. But when the aunt wanted the roughly $860,000 to buy a piece of property, Rivera “could not account for the disposition of that money and absconded to Las Vegas,” prosecutors said. Along with a prison sentence the court ordered Rivera to repay $700,000 to her aunt. About $166,000 was recovered in an escrow account.
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Lawyer Alan Mason, who has been disbarred from practicing law in Massachusetts, has been charged in federal court with defrauding a title insurer and lenders of more than $6.2 million in an alleged mortgage fraud scheme that also involves tax evasion.
According to a federal indictment filed in U.S. District Court in Massachusetts Mason operated a law firm in Princeton, Mass., but also invested in real estate. He often purchased and then quickly flipped property that was in foreclosure, making a profit on the transactions, prosecutors said.
Mason was also an agent for Stewart Title, and as a real estate attorney handled loans from lenders that he was authorized to use to pay off lien holders, sellers, taxes fees and closing costs.
But during a five year period that ended last June, Mason is alleged to have run a scheme that involved “converting to his own personal and business purposes a portion of the loan proceeds he received from lenders which were intended to be used in real estate transactions to pay off prior liens on properties,” according to the charges.
Prosecutors say Mason used phony documents — including HUD forms, checks, title insurance and more — to try and hid his actions.
“By this scheme Mason defrauded at least 10 lenders, including several federally insured financial institutions, and Stewart Title of more than $6.2 million,” according to the indictment.
But Mason also had another scheme going, prosecutors say. He avoided paying nearly $100,000 in income taxes by establishing multiple real estate trusts that did not identify himself as a trustee or the beneficiary.
“Mason used the real estate trusts to buy and sell real estate, generating substantial profits which (he) used for personal expenses such as home improvements, antique clock collections, mortgage payments, insurance premiums and investments in new properties,” the indictment says.
Mason allegedly tried to dodge the IRS by using the names of employee and relatives to form “sham trusts”. When the IRS learned of his interests in a trust he “formed a new trust and transferred assets to it,” prosecutors said.
Mason also bought real estate through the trusts. And he also knew he owed about $3.4 million in taxes for the years 1995 to 2003 but “instead of making those payments Mason spent his income, including the substantial profits he made from real estate transactions, for his personal benefit,” according to the charges.
If convicted Mason will have to forfeit property he purchased as part of the alleged scheme — even the antique clocks, according to the indictment.
In Georgia, lawyer Raymond Joseph Costanzo has pleaded guilty to federal charges for his role in a wide-ranging mortgage fraud scheme that involved 21 people. Seven had pleaded guilty, according to court documents filed by the U.S. Attorney’s office in Georgia.
According to prosecutors, Costanzo closed a number of fraudulent loans, concealing facts from the lenders he represented. He was paid $250,000 to obtain loans of more than $1.5 million in his own name, loans that prosecutors say he was not qualified to receive.
The overall scheme involved using straw borrowers, including illegal aliens and other “unqualified persons,” to purchase property at inflated prices, and bogus documents were used to dupe lenders and others.
