Town Of Monroe Justice Pleads Guilty To False Statement And Obstruction Of Justice Charges
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that LURLYN A. WINCHESTER, a former Justice for the Town Court of Monroe, pled guilty today before U.S. Magistrate Judge Judith C. McCarthy, in federal court in White Plains, on charges that she made false statements in connection with an application for a loan she obtained to purchase a residence in Monroe in order to satisfy a residency requirement attached to her position as Town Justice, and obstruction of justice for providing Federal Bureau of Investigation (“FBI”) task force members, who were questioning her about her mortgage loan, with false documents, including fabricated rent payment receipts.
U.S. Attorney Geoffrey S. Berman said: “As she admitted in court today, Lurlyn Winchester, in an attempt to fraudulently satisfy a residency requirement for a judgeship, lied and provided fake documents to secure a mortgage. She then lied to FBI task force officers and provided them with fake documents in an attempt to cover up that crime. Winchester’s lack of integrity and honesty did not merit a term on the bench. Her crimes will likely earn her a term in prison.”
According to the allegations contained in the Indictment as well as statements made in public court proceedings:
On or about November 5, 2013, LURLYN A. WINCHESTER, the defendant, was elected Town of Monroe Justice. Under New York law, she was required to reside in Monroe in order to be eligible to hold that Town of Monroe Justice position. At the time, she and her husband lived in a home in New City, New York (“the New City Home”), that they purchased in 1997. In or about November 2013, WINCHESTER attempted to purchase a condominium in Monroe, New York (“Monroe Condominium-1”). On or about December 17, 2013, WINCHESTER entered into a lease agreement with a tenant (“Tenant-1”) to rent the New City Home to Tenant-1. At around that time, Tenant-1 provided WINCHESTER with a $7,500 check. On a later date, Tenant-1 also provided WINCHESTER with a $1,500 check.
In or about March 2014, the deal to purchase Monroe Condominium-1 fell through and WINCHESTER returned $7,500 to Tenant-1. In the same month, WINCHESTER entered into a contract to purchase a second condominium (“Monroe Condominium-2”), which was in the process of being built.
In or about June 2014, WINCHESTER began submitting applications for a residential loan and supporting documents to representatives of Hudson United, who, in turn, submitted these items to several lenders. WINCHESTER represented, in the applications, that the New City Home was the couple’s “present address.” She further represented in the applications that the loan was to be used to purchase Monroe Condominium-2. On the loan applications and an Affidavit of Occupancy signed by WINCHESTER, she asserted that Monroe Condominium-2 would be their primary residence.
In or about late 2014, two lenders that had received WINCHESTER’s loan application for Monroe Condominium-2 declined to approve the loan. The first did so because WINCHESTER had too much debt compared with her income. The second did so after it reviewed documents the defendant submitted, upon the lender’s request, that were supposed to show that she intended to rent out her New City Home. The documents she submitted included a phony lease agreement and copies of the $7,500 check and $1,500 check Tenant-1 had provided to her at the end of 2013 and in early 2014, at the time WINCHESTER was planning to purchase Monroe Condominium-1. The lender rejected these, noting that the dates of the checks and the lease did not make sense.
Thereafter, Hudson United submitted WINCHESTER’s loan materials to a third lender, Plaza Home Mortgage (“Plaza”). Plaza also requested information about WINCHESTER’s representation that she and her husband intended to move to Monroe Condominium-2 and rent out the New City Home. In response, on or about February 6, 2015, WINCHESTER sent Hudson United a letter in which she stated that “in regard to our intent with the current primary residence, [New City Home], please be advised that we intend on renting the premises.” She further represented that they “already have a prospective tenant who is anxiously awaiting to take occupancy of the residence.”
On or about February 27, 2015, Plaza informed Hudson United that it placed the loan in “suspend for decline status” because of insufficient income. On or about March 20, 2015, based on WINCHESTER’s representation, Hudson United informed Plaza that there would be rental income from the New City Home. As a condition for closing on the loan, Plaza requested, among other things, a copy of a fully executed 12-month lease and a canceled check for a security deposit.
In response, on or about March 27, 2015, WINCHESTER submitted to Hudson United, which then submitted to Plaza, the following items containing false statements: (1) a phony lease agreement providing that Tenant-1 was to going to pay $4,500 a month to lease the New City Home; and (2) a copy of two checks, made out to WINCHESTER, each in the amount of $4,500, dated March 23, 2015, signed by Tenant-1, and drawn on Tenant-1’s bank account. The checks each contained a false notation indicating it was for the security deposit or first month’s rent for the New City Home. Unbeknownst to Hudson United and Plaza, Tenant-1 did not intend to rent the New City Home and Tenant-1 did not provide the money to pay for a security deposit or first month’s rent. In fact, WINCHESTER provided Tenant-1 with $9,000 to cover the two $4,500 checks Tenant-1 issued to WINCHESTER.
On or about April 2, 2015, WINCHESTER and Plaza closed on the loan and Plaza funded the purchase of Monroe Condominium-2. Tenant-1 never moved to the New City Home and WINCHESTER did not move to Monroe Condominium-2.
On or about July 28, 2016, members of an FBI task force conducting an investigation interviewed WINCHESTER, at her office in New City, about the statements she made in connection with the loan she received from Plaza Home Mortgage.
Thereafter, the defendant met with Tenant-1, enlisted Tenant-1’s support in providing a false story to investigators, and had Tenant-1 initial fabricated “rent receipts” that indicated that Tenant-1 made a total of $9,000 in incremental cash payments to WINCHESTER, between May 15, 2014, and January 16, 2015, as advance rent payments for the New City Home.
On or about August 1, 2016, task force members returned to WINCHESTER’s New City office and interviewed her again. During the interview, she gave them a number of documents designed to support her false account that Tenant-1 intended to rent the New City Home but decided, after the closing on Monroe Condominium-2 on April 2, 2015, not to move in. The documents she provided to the task force members included, among other things, copies of the false and fabricated “rent receipts.”
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WINCHESTER, 59, of New City, New York, pled guilty to both counts of an indictment. The first charged her with making false statements to a mortgage lending business, which carries a maximum sentence of 30 years in prison and a maximum fine of $1,000,000 or twice the gross gain or loss from the offense. The second charged her with falsifying records in a federal investigation, with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of a federal department or agency, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
WINCHESTER’s sentencing is scheduled for August 28, 2018, at 2:00 p.m.
Mr. Berman praised the outstanding investigative work of the FBI. He also thanked the Orange County Sheriff’s Office and the Orange County District Attorney’s Office for their assistance.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorney Margery B. Feinzig is in charge of the prosecution.