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REALTOR RECEIVES 10 YEAR PRISON SENTENCE IN LARGE-SCALE MORTGAGE FRAUD RING

OCTOBER 21, 2010

BOSTON, Mass. - A realtor convicted of conspiracy and wire fraud by a federal jury in June was sentenced late yesterday for various roles in a mortgage fraud ring that conducted 21 fraudulent property transactions in the Greater Boston area involving 10 mortgage lenders and more than $10.6 million in loan proceeds.

ERNST APPOLON, 30, of Braintree, was sentenced yesterday by U.S. District Judge George A. O’Toole, Jr. to a term of 120 months imprisonment, to be followed by 3 years of supervised release.

A total of 11 defendants were indicted in May of 2008. Ernst Appolon was found guilty of one count of conspiracy to commit wire fraud and thirty-four counts of wire fraud by a federal jury following a seven-week trial in June 2010. Also convicted on conspiracy and wire fraud charges at the same trial were Eric L. Levine of Brookline; J. Daniel Lindley of Jamaica Plain; Daniel Appolon of Dorchester; and LaToya Haltiwanger of California. Levine and Lindley were also convicted of money laundering. Five other defendants pleaded guilty before trial and one defendant is pending trial.

The evidence at the jury trial showed that between May 2005 and June 2006, the defendants participated in a conspiracy to obtain $10.6 million in mortgage loan proceeds by fraud. The scheme involved the use of inflated purchase prices and documents containing numerous false representations, including false information about the purchase price, borrower income, employment, and intent to reside in the property. The difference between actual purchase prices negotiated with sellers and the inflated purchase prices submitted to lenders ranged as high as $255,000 on properties in South Boston, Dorchester, Jamaica Plain, Quincy, Hyde Park and Cohasset, aggregating to more than $1.9 million. From this $1.9 million, the defendants pocketed more than $1.7 million in illegal proceeds. The mortgages on all of the properties were defaulted upon and nearly all went into foreclosure.

Ernst Appolon served as the real estate agent to identify properties for use in the fraud scheme. He participated in inflating the purchase prices on mortgage loan applications and helped recruit individuals to act as straw buyers to obtain the fraudulent loans in their names. He was also involved in determining how $1.7 million in proceeds from the loans would be distributed among the conspirators, obtaining a very large share for himself.

Ernst Appolon is the third defendant sentenced to date. On October 18, 2010, Judge O’Toole sentenced Daniel Appolon to 42 month in prison and ordered co-defendant Samuel Jean-Louis to serve a prison term of 22 months. Seven additional defendants are currently pending sentencing.

United States Attorney Carmen M. Ortiz; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Robert Bethel, Inspector in Charge of the United States Postal Inspection Service; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation, Boston Field Division; Boston Mayor Thomas M. Menino; and Boston Police Commissioner Edward Davis made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Victor A. Wild and Ryan M. DiSantis of Ortiz’s Economic Crimes Unit and Mary B. Murrane, Chief of Ortiz’s Asset Forfeiture Unit.

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Mortgage fraud is a key focus of the Department of Justice who in November 2009 created the Financial Fraud Enforcement Task Force. The task force works 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.

 

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