LAWYER PLEADS GUILTY TO MAKING FALSE STATEMENT TO
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
The United States Attorney’s Office today announced that DAVID AVIGDOR, 58, of New Haven, pleaded guilty yesterday before Chief United States District Judge Alvin W. Thompson in Hartford to making a false statement to the U.S. Department of Housing and Urban Development (“HUD”) in connection with a real estate closing.
According to court documents and statements made in court, AVIGDOR acted as the settlement agent for the sale of 211 Lloyd Street from Marshall Asmar to Alicia Martineau for a sale price of $160,000. The mortgage loan on the property was insured by the Federal Housing Administration (“FHA”), an agency within HUD that provides insurance of mortgage loans made by banks and private lenders. The Form HUD-1 settlement statement for the transaction stated that the cash due to the seller, Marshall Asmar, was $144,763.42. AVIGDOR, as the settlement agent, signed the HUD-1, and he certified that the HUD-1 was a “true and accurate account of this transaction. I have caused or will cause the funds to be disbursed in accordance with this statement.”
AVIGDOR, however, did not disburse $144,763.42 to the seller, as indicated in the HUD-1. Instead, AVIGDOR disbursed $93,000 to the seller (Asmar) and $49,375.00 to Sheda Telle Construction, a fictitious construction company, according to disbursement instructions provided by Morris Olmer. AVIGDOR admitted in court that he made the statements on the HUD-1 with disregard of whether the statements were true or false, and with an intent to deprive the FHA of the information necessary to make a decision on whether to insure the loan. He represents that he was unaware that Sheda Telle Construction was fictitious, but admits that there were red flags about the transaction to which he turned a blind eye.
Olmer and Asmar were convicted by a jury of, among other things, conspiring to defraud the FHA and wire fraud at a trial in April 2011 at which two other individuals, Rab Nawaz and Wendy Werner, were also convicted. The jury could not reach a verdict on any counts against AVIGDOR. A sixth defendant, former real estate appraiser Thomas Gallagher, pleaded guilty during the trial. Eight other individuals involved in the scheme pleaded guilty prior to the commencement of that trial.
The leader of the conspiracy, Syed Babar, was sentenced to 10 years in prison. Nawaz was sentenced to 90 months’ imprisonment; Olmer and Gallagher were each sentenced to 60 months’ imprisonment; Asmar was sentenced to 52 months’ imprisonment; and Werner was sentenced to 48 months’ imprisonment. A former mortgage broker, Nathan Russo, was sentenced to 30 months’ imprisonment. The others convicted, including Alicia Martineau, who acted as a “straw” or nominee buyer for 211 Lloyd Street, have not yet been sentenced.
When he is sentenced, AVIGDOR faces a maximum term of imprisonment of one year imprisonment and a $100,000 fine. As part of the plea agreement, AVIGDOR agreed to surrender his law license for one year, and agreed that if he is employed by a lawyer or performs work in a law office in the future, he will not perform or engage in any work representing buyers or banks in real estate closings. AVIGDOR also agreed to make a $20,000 payment toward restitution before sentencing, which is scheduled for June 29, 2012.
This matter has been investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development – Office of Inspector General. The case is being prosecuted by Assistant United States Attorneys Eric J. Glover and Susan Wines.
In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force is focusing on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes, and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an email to email@example.com.
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
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