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REAL ESTATE LAWYER SENTENCED TO PRISON FOR PAYING KICKBACKS

August 9, 2011

BOSTON, Mass...A Newton real estate closing lawyer was sentenced today in federal court in connection with a 12 count Information charging him with causing and obtaining kickbacks and other unearned fees in connection with the closing of residential home loans in Mass. and RI from 2005 to 2007.

EVAN GREENE, 36, was sentenced by United States District Court Judge Richard G. Stearns to one year and one day imprisonment and a $10,000 fine in connection with his plea to a 12 count information charging him with violating the anti-kickback and unearned fees provisions of the Federal Real Estate Settlement Procedures Act.

At today’s hearing, GREENE, a lawyer at the law firm of Portnoy & Greene, P.C., in Needham, admitted that in exchange for serving as the preferred and anticipated exclusive closing agent for loan closings from two branch offices of Mortgage Options of America in Mass. and RI, GREENE agreed to include fees on Form HUD-1 settlement statements for services not actually rendered. GREENE also caused numerous kickbacks to be paid to brokers and others in connection with foreclosure rescue transactions in Mass. and RI. In particular, GREENE admitted to paying monies at closing inconsistent with the disclosures on the Form HUD-1 Settlement Statement.

Many of the properties involved in this matter were foreclosure rescue transactions in which financially distressed homeowners sold their homes to “investors,” with the understanding that they could repurchase their homes within a one or two-year period. As part of these transactions, straw buyers obtained loans well in excess of the distressed homeowner’s indebtedness. The straw buyers pocketed these excess loan proceeds, or kicked them back to brokers and others involved in the transactions. GREENE pled guilty to charges that he failed to disclose the nature of these transactions to the lenders Portnoy & Greene represented at these closings.

The prosecution of GREENE stems from a year long investigation into a series of foreclosure rescue transactions in Mass. and RI that were orchestrated by mortgage brokers at various branches of Mortgage Options of America. As part of the investigation, five mortgage brokers have been charged with submitting fraudulent loan applications in order to obtain mortgage financing for these transactions. Brokers JEREMY DEBARROS, CHRISTIANO LIMA, RYAN LAZAR, RYAN SMITH and ROBERT REGO were all charged with and pleaded guilty to wire fraud in connection with their submission of fraudulent loan applications. These brokers have received sentences ranging from two years probation to 21 months imprisonment. GREENE was not charged with actual knowledge of the fraudulent loan applications.

United States Attorney Carmen M. Ortiz said, “Real estate closing lawyers serve as the eyes and ears of lenders in real estate closings. They are critical gatekeepers to prevent fraud in the residential home lending process. Falsifying real estate settlement documents is a crime, even when a lawyer insulates himself from blatant falsehoods in the loan application process. We will aggressively prosecute and seek prison time for lawyers who abdicate their fiduciary responsibility in order to increase their business profits.”
U.S. Attorney Ortiz; Robert Bethel, Inspector in Charge of the U.S. Postal Inspection Service; Jon Rymer, Inspector General of the Federal Deposit Insurance Corporation; and Steven Ricciardi, Special Agent in Charge of the U.S. Secret Service made the announcement today. The case was prosecuted by Assistant U.S. Attorney James P. Dowden and Special Assistant U.S. Attorney Andrea D. Roller of Ortiz’s Economic Crimes Unit.

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Mortgage fraud is a key focus of the Department of Justice, which created the Financial Fraud Enforcement Task Force in 2009. 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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