Owner Of Foreclosure Remediation Business Found Guilty In White Plains Federal Court For Fraudulent Scheme That Preyed On Distressed Homeowners
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ANDREW BARTOK, a former owner of the foreclosure remediation business Revelations Consulting (“Revelations”), which was located in New Jersey and Connecticut, was found guilty yesterday in White Plains federal court of charges related to a scheme to defraud distressed homeowners, commit witness tampering and obstruct federal court proceedings. BARTOK was convicted after a 15-day jury trial presided over by U.S. District Judge Cathy Seibel. He was remanded into the custody of the U.S. Marshals following his conviction.
Manhattan U.S. Attorney Preet Bharara said: “Andrew Bartok dangled false promises of relief to desperate homeowners who were trying to keep their homes, but instead, he victimized them by stealing their money and forcing many of them into involuntary bankruptcy. While Andrew Bartok vacationed in tropical locales and spent his hours in casinos gambling away his clients’ hard-earned money, his clients were losing their most treasured possessions – their homes. He will now face justice for the fraud that he committed against vulnerable and needy homeowners up and down the East Coast.”
According to the Superseding Indictment filed in White Plains federal court, other court documents, and the proof at trial:
From 2000 through February 2011, BARTOK owned Revelations, a company which also operated under the name “Foreclosure Club of America.” BARTOK and his co-conspirators at Revelations and Foreclosure Club of America solicited individuals in New York, New Jersey, Connecticut, Pennsylvania, Georgia and Florida who were facing foreclosure proceedings on their homes. BARTOK promised those homeowners that – in exchange for fees paid to Revelations – they would be able to stay in their homes and later repurchase their homes at foreclosure auctions for a fraction of the dollar amount of their mortgage obligations.
In reality, BARTOK and his co-conspirators defrauded hundreds of homeowners of millions of dollars. None of BARTOK’s clients ever bought their homes back using the methods he advocated. Instead, BARTOK and his co-conspirators filed fraudulent bankruptcy petitions and other false documents with U.S. Bankruptcy Courts, primarily in Poughkeepsie, New York, and Newark, New Jersey. BARTOK and his employees forged the names of Revelations’ clients on fraudulent filings under penalty of perjury, subjecting these clients to potential arrest and imprisonment.
BARTOK and his co-conspirators also routinely instructed clients not to attend court proceedings, and not to mention Revelations if contacted by court personnel. As a result of following this advice, at least two of Revelations’ clients were arrested by U.S. Marshals and brought before a U.S. Bankruptcy Judge in Poughkeepsie to explain false documents that BARTOK filed in their names. These clients of Revelations were released after they explained BARTOK’s role in these filings.
The fraudulent documents were filed by BARTOK and his co-conspirators in U.S. Bankruptcy Courts for the improper purpose of using the bankruptcy laws to forestall the foreclosure of the clients’ homes as long as possible while Revelations continued to collect its monthly fees. Ultimately, the bankruptcy cases were dismissed and Revelations’ clients – who already had paid significant sums of money to Revelations – were evicted from their homes.
Throughout the fraud, BARTOK collected millions of dollars in fees from his victims. These criminal proceeds funded a lavish lifestyle for BARTOK and his family – including a $130,000 Mercedes-Benz automobile, numerous trips to Hawaii and Aruba, and high-stakes gambling at casinos in Atlantic City.
* * *
BARTOK, 66 of Clifton, New Jersey, was convicted of one count of conspiracy to commit mail and wire fraud, one count of mail fraud, one count of conspiracy to commit bankruptcy fraud and obstruction of justice, one count of bankruptcy fraud, one count of conspiracy to commit witness tampering, one count of making false statements to United States Bankruptcy Judge Cecelia Morris and one count of obstruction of justice. BARTOK was acquitted of one count of obstruction of justice and still faces trial in connection with acts committed during the course of his federal criminal case – including filing a perjurious affidavit and contempt of court. He faces a total maximum sentence of 95 years in prison and is scheduled to be sentenced by Judge Seibel on February 6, 2013.
Mr. Bharara praised the United States Postal Inspection Service for its work on this case.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive 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.
This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys John P. Collins, Jr. and Jeffrey Alberts are in charge of this prosecution.