Beaver Man Pleads Guilty In Mortgage Fraud Scheme
PITTSBURGH, Pa. ‑ Acting United States Attorney Robert S. Cessar announced today, August 9, 2010, that Ralph Esposito, a resident of Beaver, Pennsylvania, pleaded guilty in federal court to a charge of Mail Fraud and Wire Fraud Conspiracy.
Esposito, age 46, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, Assistant United States Attorney Brendan T. Conway advised the court that Esposito participated in a mortgage fraud scheme with several other individuals associated with Beaver Financial Services. As part of the conspiracy, Beaver Financial Services submitted loan applications on behalf of individuals and corporations that overstated the financial position of the borrowers, mainly related to the borrowers' income and assets. Individuals associated with the conspiracy also submitted fraudulent documents to the lenders that supported the fraudulent representations.
In addition, the mortgage fraud scheme included the submission to lenders of appraisals that overstated the true fair market values of the properties serving as collateral for the loans. The settlement statements associated with the loans were also fraudulent in that they reflected that the borrowers were making substantial down payments associated with the purchase of real estate and that liabilities associated with the collateral were being paid, when, in fact, the borrowers were often not making down payments and the liabilities associated with the collateral were often not being paid.
Esposito participated in the conspiracy mainly as a purchaser of real estate. The real estate was often purchased in the name of SPO Capitol, a corporate entity with which he was associated.
Judge Cercone scheduled sentencing for December 10, 2010. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Esposito. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.
Mortgage industry members with knowledge of fraudulent activity are encouraged to call the Mortgage Fraud Task Force at (412) 894‑7550. Consumers are encouraged to report suspected mortgage fraud by calling the Pennsylvania Attorney General's Consumer Protection Hotline at (800) 441‑2555.
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