Caged Birds Sing?
by Paul Bass | Feb 16, 2013 8:27 pm
Posted to: Housing, Legal Writes
As the alleged masterminds of another multimillion-dollar New Haven real-estate scam await sentencing, three more of their alleged helpers have been charged with federal crimes.
A federal grand jury handed down indictments against the three alleged helpers, one loan originator and two lawyers, the U.S. Attorney’s Office announced Friday.
The charges include mail fraud, wire fraud, conspiracy, and making false statements.
The scam involved arranging fake sales of more than 50 New Haven properties—many of them in struggling neighborhoods—to rip off mortgage companies. Scammers had “straw buyers” pretend to buy properties and take part in arranging fake documents (including federal Housing and Urban Development department forms) to obtain new mortgages. The scammers, who were in on both sides of the fake sales, pocketed the mortgage money and often let the properties rot. Read about the trail of blight here.
The properties involved in the latest indictment include 369 Shelton Ave., 569 Elm St. (which the straw buyer allegedly paid $365,000 for in 2007), and 115 and 147 Lloyd St., which one tenant described as “hell.”
Click here to read the latest indictment.
The latest indictment involves a second fraud ring perpetrating a similar scam. The feds have already arrested the masterminds of the scam—including one who used the alias of a Ghanaian independence leader. They’ve obtained guilty please from some of them.
Those pleading guilty have not all yet gone to jail, instead remaining free to continue working in the field as their sentencings have been delayed. One example: Joseph Menachem “Yossi” Levitin, who faces up to 30 years in jail and $20 million in fines. He pleaded guilty last July.
In these cases involving multiple conspirators, prosecutors generally pressure those pleading guilty to provide evidence and testify against their alleged accomplices. In return, those cooperating can win lighter sentences. An ironic result in some of these cases is that the masterminds, or the people making the most money or conducting the most fraud, can spend less (if any) time in jail than former accomplices against whom they testify.
One lawyer involved in this scheme, Bradford Rieger of Branford, did get two years in prison after pleading guilty to conspiracy to commit mail fraud, wire fraud and bank fraud. Read about that here.
One of those named in the latest indictment (technically a “superseding” indictment in the case) announced Friday, the loan originator, Andrew Constantinou, already had one run-in with the law in the past for alleged fraud; in that case he signed an agreement with the state to forfeit his license for five years. He couldn’t be reached for comment Friday. Milford attorney Genevieve Salvatore was not available for comment, according to someone answering the phone at her office. The third indictee, attorney Larry Dressler of New Haven, plans to plead not guilty; he declined comment on the case.
One of the alleged masterminds, Robert Woodson, has pleaded not guilty; he is jail awaiting trial. The new indictment adds new charges against him, too. During years of run-ins with city inspectors, and in his dealings with the properties in question in the indictments, Woodson went by a different name: Kwame Nkrumah. That is the name of the man who helped liberate Ghana from British rule in 1957. The real Nkrumah died in 1972.
Another participant in the scheme—the straw buyer—was a public-housing tenant who allegedly took money from the masterminds to pretend he was the one spending more than $1 million to buy properties. Read about him and “Kwame” here.
Tags: mortgage fraud
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it was not just the banks these people hurt!! But selling the homes at a higher price it made the community pay higher taxes than their property were worth and a lot more than they could sell them for! These people indirectly were the demise of the lose of some peoples homes! I had several homes in my area that had deals during this time some by these folks some by one timers. Making it look like these home were worth more than there assessed value and tripling the taxes on them…this was of course fixed over time as people started losing there homes. and now they are assessed right. But not after many suffered. This is more than a crime that hurt banks!! GRR