Attorney Sentenced To 30 Months In Prison For Role In Mortgage Fraud Scheme
For Immediate Release
U.S. Attorney's Office, District of Connecticut
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that JOSEPH KRIZ, 50, of Wilton, was sentenced on Friday, May 31, by United States District Judge Janet C. Hall in New Haven to 30 months of imprisonment, followed by three years of supervised release, for his role in a Fairfield County mortgage fraud scheme.
According to court documents and statements made in court, KRIZ practiced as a real estate attorney and was a licensed mortgage broker. Beginning in approximately 2005, KRIZ partnered with William A. Trudeau, Jr. to purchase, develop and sell properties by defrauding banks and mortgage lenders. As part of the scheme, Trudeau, KRIZ and others submitted false mortgage loan applications to financial institutions to obtain mortgages on various properties in Fairfield County in order to develop and sell the properties for profit, and to pay off debts owed to “hard money” lenders from whom they had previously obtained high interest loans. The mortgage applications, which included false income information and omitted the mortgage applicants’ true indebtedness, caused the financial institutions to issue mortgage loans on properties that Trudeau, KRIZ and their co-conspirators would not have otherwise been qualified to purchase, allowing the applicants to qualify for mortgages that far exceeded their ability to repay the loans.
Through this scheme, Trudeau, KRIZ and others fraudulently obtained more than $4 million in mortgage loans to purchase six properties in Westport and Newtown. To date, mortgage lenders have lost more than $1.9 million.
In addition, KRIZ stole approximately $3.5 million from his IOLTA account in order to service the various loans he and his co-conspirators had taken to secure the properties.
Trudeau also defrauded private lenders of a total of more than $1 million.
On August 4, 2008, KRIZ pleaded guilty to one count of conspiracy to commit bank fraud, one count of fraud in loan and credit applications, and one count of mail fraud.
KRIZ cooperated with the investigation and testified at Trudeau’s trial. On October 9, 2012, a jury found Trudeau guilty of one count of conspiracy to commit bank fraud, mail fraud and wire fraud, and one count of wire fraud. On February 12, 2013, Trudeau was sentenced to 188 months of imprisonment.
This matter was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys Rahul Kale and Christopher Schmeisser.
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Updated March 18, 2015