DEVELOPER CHARGED IN MULTIPLE MORTGAGE SCAM
BOSTON, Mass. - A Roxbury developer was charged today in federal court with 62 counts of Wire Fraud, Bank Fraud and Money Laundering in connection with a multi-year multi-property mortgage fraud scheme in Dorchester and Roxbury.
United States Attorney Carmen M. Ortiz, Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, and Susan Dukes, Special Agent in Charge of Internal Revenue Service Criminal Investigation – Boston Field Division, announced today that MICHAEL DAVID SCOTT, 44, of Mansfield, was charged in an Indictment with 28 counts of Wire Fraud, 12 counts of Bank Fraud and 22 counts of Money Laundering.
“This investigation represents an extensive and continuing federal effort to identify and prosecute those individuals who engaged in mortgage fraud schemes which had a devastating impact on Boston’s neighborhoods,” said U.S. Attorney Ortiz. “Frauds of this kind line the pockets of unscrupulous schemers at the expense not only of mortgage lenders, but of so many homeowners who saw property values in whole neighborhoods decimated.”
The Indictment alleges that from September 2006 to April 2008, SCOTT, committed fraud in connection with the purported sale of some 36 condominium units in Boston. SCOTT and his associates bought multi-family dwellings promising to convert them into condominiums, and then resold the individual units to various straw buyers. SCOTT arranged for the buyers to obtain mortgage financing by falsifying key information, such as the buyers’ income, assets, downpayment and residence. In most instances the buyers obtained residential mortgage loans for properties that they never intended to live in. While the lenders (mortgage companies and one bank) were led to believe they were lending to residential purchasers, SCOTT recruited buyers by representing the purchases to them as a no-money-down “investment” opportunity. The “investors” were assured that they would not have to make any down payments, pay any closing costs, or pay expenses relating to the maintenance of the units, but would share in profits when the units were sold.
If SCOTT is convicted on these charges, each count of Bank Fraud carries a sentence of up to 30 years in prison to be followed by five years of supervised release and a fine of one million; each Wire Fraud count carries imprisonment up to 20 years followed by three years of supervised release, and a $250,000 fine; the Money Laundering counts each carry a maximum punishment of 10 years in prison, followed by three years of supervised release and a fine of $250,000.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service. It is being prosecuted by Assistant U.S. Attorneys Victor A. Wild and Ryan M. DiSantis of Ortiz's Economic Crimes Unit.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Mortgage fraud is a key focus of the Department of Justice. The Department of Justice alongside its federal, state and local partners is committed to investigating and prosecuting significant financial crimes. The Department is committed to combating discrimination and fraud in the lending and financial markets, and recovering proceeds for victims of financial crimes.
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