A Florida mortgage broker has pleaded guilty to selling the same mortgage notes to multiple investors in a scheme that led to millions of dollars in losses. Among his victims were Bank of America Corp.
On Friday, Peter A Bakowski agreed to a guilty plea, according to documents filed with the U.S. District Court for the Middle District of Florida.
The mortgage broker is accused of selling the same mortgage to multiple investors while hiding existing liens from potential buyers of the properties. The note buyers wound up with subordinated liens when they thought they were in first position.
The scheme began in 2003 and continued until last year. More than 30 investors were impacted, and more than 150 loans were involved.
Title insurers, who reportedly relied on the defendant’s representation that prior liens had been satisfied, issued title policies on the properties. Stewart Title Insurance Co. is reportedly on the hook for $1.3 million as a result of Bakowski’s fraudulent actions.
In the court filings, an FBI agent described a December 2004 transaction where Bakowski allegedly obtained a $30,000 mortgage on the property, then sold it to a Florida couple — carrying a $75,000 loan on the property himself. He subsequently sold the $75,000 note to one investor for $36,000 and another investor for an unknown amount. In February 2006, the borrowers deeded the property back to Bakowski, and he resold the property to another couple for $59,000 — with Bank of America financing a $54,682 purchase loan — netting him $51,882.
“In effect, Bakowski’s sales devolved into the equivalent of a Ponzi scheme, selling the thing several times, promising relatively high rates of return and using the incoming money to effectively keep the scheme afloat,” the plea agreement stated.
He is also accused of taking out loans on properties even though the properties were already mortgaged.
In all, Bakowski admitted to $12 million in secondary fraud on 43 properties. Investors allegedly lost between $7 million and $20 million.
The defendant faces as many as 30 years in prison for his admission of one count.
United States of America vs. Peter Anthony Bakowski.
Case Number 8:09MJ1409 MAP, Sept. 11, 2009 (U.S. District Court for the Middle District of Florida, Tampa Division)