Long Island Husband and Wife Sentenced to Prison for Bank Fraud and Medicaid Fraud
Defendants Fraudulently Engaged in Short Sale of Property Next to Sacred Heart Academy, Failing to Disclose Academy’s Offer for Property and Providing False Documents to Bank
Earlier today, in federal court in Central Islip, defendants Joseph Atias and Sofia Atias were sentenced by United States District Judge Denis R. Hurley to 40 months’ and 28 months’ imprisonment, respectively, following their March 30, 2017 trial convictions for bank fraud and conspiracy to commit bank fraud in connection with the sale of their real property to Sacred Heart Academy in Hempstead for athletic fields. They were also convicted of Medicaid fraud. As part of their sentences, the defendants were ordered to pay $465,965 in forfeiture and $49,956 in restitution.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Joseph and Sofia Atias committed fraud schemes to try to get out from under mortgage debt and to fraudulently obtain Medicaid funds, essentially flaunting the laws to which we all must adhere,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will make every effort to ensure that those who would manipulate the system are called to account.
“In a clear case of double dipping, the defendants convinced the lending institution of their eligibility to qualify for a short sale on their property, recruited a relative to serve as a straw buyer for the property, and profited from the funds of a subsequent sale of the property,” stated FBI Assistant Director-in-Charge Sweeney. “At the same time they were running this scheme, they were also found to have engaged in significant fraud against the government. May today’s sentencing remind those who exploit government programs and manipulate gaps in the mortgage and banking sectors that they will face the error of their ways.”
The Bank Fraud Scheme
At trial, the government’s evidence established that shortly before the sale of their property adjacent to Sacred Heart Academy for $925,000, the defendants sold the property in a short sale to Bank of America for $480,000 to discharge their mortgage debt. In negotiating the short sale with the bank, the defendants and their co-conspirator attorney concealed Sacred Heart Academy’s pending offer and submitted a fraudulent contract of sale and other false documents representing that they did not have funds to pay off the mortgages in full. As part of the fraudulent short sale, the defendants used a relative as a “straw buyer” of the property to create the appearance of an arms-length sale. Shortly after that sale, the defendant’s straw buyer sold the property to Sacred Heart Academy for approximately half a million dollars in profit.
The Medicaid Fraud Scheme
The government’s evidence at trial established that between 2009 and 2015 the defendants fraudulently obtained Medicaid funds, by concealing their self-employment income and available cash resources, including trust fund monies and the $465,000 in proceeds from the bank fraud scheme.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Burton T. Ryan, Jr., are in charge of the prosecution. Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division is handling matters related to forfeiture.
Age: 48 years old
Residence: Great Neck, New York
Age: 54 years old
Residence: Great Neck, New York
E.D.N.Y. Docket No. 14-CR-403 (DRH)