Attorney Sentenced To 57 Months In Prison For Mortgage Fraud Schemes
PITTSBURGH, Pa. ‑ A resident of Murrysville, Pa., has been sentenced in federal court to 57 months in prison and three years of supervised release on his conviction of nine counts of wire fraud and two counts of wire fraud conspiracy, United States Attorney David J. Hickton announced today.
United States District Judge Donetta Ambrose imposed the sentence on John Chaffo, 50.
According to information presented to the court, Chaffo participated in a complex mortgage fraud schemes involving more than 57 properties and $10 million in loans. Chaffo was an attorney who specialized in closing real estate transactions. The documents related to the closing that were fraudulent included settlement statements that falsely reported that the purchasers of the real estate had made significant down payments associated with the purchases, when, in fact, they had not. The settlement statements were also fraudulent because they included elevated sales prices and purported seller‑held second mortgages that really did not exist.
In connection with the first conspiracy charged, Chaffo closed fraudulent loans that had been brokered by Michael Dokmanovich. The primary seller was John Orth and the primary buyer was Daniel Smithbower. In connection with the second conspiracy charged, the primary broker was also Dokmanovich, but the primary seller was Bernardo Katz. Katz has been charged in connection with his role, but he is currently a fugitive believed to be in Brazil.
Assistant United States Attorneys Brendan T. Conway and Gregory Melucci prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Mortgage Fraud Task Force for the investigation leading to the successful prosecution of Chaffo. 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.
Protect yourself from fraud, and report suspected cases of financial fraud to local law enforcement.