One Attorney Pleads Guilty, Another Is Sentenced In Separate Mortgage Fraud Schemes
PITTSBURGH, Pa. - Acting United States Attorney Robert S. Cessar announced today, May 28, 2010, that during the week beginning May 24, 2010, one attorney pleaded guilty in connection with a mortgage fraud scheme and another attorney was sentenced to two years of imprisonment in connection with a different mortgage fraud scheme.
On May 27, 2010, Daniel Sporrer, a resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court in Pittsburgh to a charge of Wire Fraud Conspiracy on connection with a mortgage fraud scheme.
Sporrer, age 46, pleaded guilty to one count before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, Assistant United States Attorney Brendan T. Conway advised the court that Sporrer participated in a mortgage fraud scheme with Robert Arakelian, who was a mortgage broker associated with Pittsburgh Home Loans, Karen Atkison, who was a closing agent who worked with Sporrer, and others. As part of the conspiracy, Arakelian submitted false loan applications to lenders that falsely reported that the borrowers had sufficient funds in their own accounts to make the down payments associated with the purchases of real estate and to otherwise qualify for the loans to finance the purchases of the real estate. The closing documents, which were prepared and executed by Sporrer and Atkison, falsely reported to the lenders that the borrowers made down payments from their own funds at the closings, when, in fact, they did not make any payments at the closings. In addition, Sporrer advanced money to Arakelian in advance of the closings so that Arakelian could purchase certified checks, copies of which were made to present to the lenders to falsely verify that the borrowers had made the down payments.
Judge Fischer scheduled sentencing for October 29, 2010. The law provides for a total sentence of twenty 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.
On May 25, 2010, Robert Danenberg, a resident of Pittsburgh, Pennsylvania, was sentenced to two years of incarceration and three years of supervised release on his conviction of Wire Fraud Conspiracy in connection with a different mortgage fraud scheme.
United States District Judge Ambrose imposed the sentence on Danenberg, age 55.
According to information presented to the court by Assistant United States Attorney Brendan T. Conway, Danenberg is an attorney who specialized in closing real estate transactions. He participated in a mortgage fraud conspiracy in which a co-conspirator recruited buyers to purchase properties at fraudulently elevated prices and financed through fraudulently obtained loans. Danenberg's role in the conspiracy was to close the fraudulent loans, and the closings themselves were fraudulent in two ways. First, the closings required the borrowers to bring certified funds to the closings from their own funds to make the down payments associated with the purchase. The borrowers, however, did not have sufficient funds to make the down payments and were often getting cash back at the closings. The down payments were paid by the sellers, the mortgage broker, and on several occasions, by Danenberg himself. The closings were also fraudulent in that the settlement statements reflected payments to contractors for work purportedly already done on the properties serving as collateral for the loans. In fact, however, as Danenberg well knew, those payments were kickbacks to participants in the conspiracy.
In total, Danenberg closed approximately 70 fraudulent loans totaling in excess of $5,000,000 of loan proceeds. Danenberg pleaded guilty after four days of trial.
The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Sporrer and Danenberg. 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 United States Secret Service; Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; and the United States Postal Inspection 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.