Jury Finds Title Manager Guilty In Mortgage Fraud Scheme
PITTSBURGH, Pa. - After deliberating for seven hours, a federal jury of four men and eight women found Catherine Slane guilty of four counts of conspiracy and wire fraud, United States Attorney David J. Hickton announced today.
Slane, 53, of Tarentum, Pa., was tried before United States District Judge Nora Barry Fischer in Pittsburgh, Pa.
According to Assistant United States Attorney Brendan T. Conway, who prosecuted the case, the evidence presented at trial established that Slane was employed as the Senior Title Manager at First Olympic Settlement Services and specialized in closing residential real estate transactions.
Russell Goggin, who passed away prior to Indictment, operated a company called Triplex Properties, which was a company that purchased properties in distressed circumstances -- from estates or from people attempting to sell their homes themselves and not through a real estate broker. He would enter into contracts in which he agreed to purchase properties at certain prices. Normally, before the closing on that transaction, Goggin would then attempt to locate buyers for the properties. He would advertise the house as "rent-to-own" which attracted individuals who could not typically afford to buy home because of credit issues, lack of a down payment, or for some other reason.
Despite their economic circumstances, Goggin convinced the buyers to purchase the homes promising to make improvements on the homes and by claiming that they would not have to make any down payments associated with the purchases. Based on those misrepresentations, the buyers agreed to purchase the properties from Goggin for many times the values of the homes.
Goggin, working through a Peter Kamaras, a mortgage broker who operated Single Source Mortgage, obtained financing for the buyers the purchase the homes through a series of fraudulent representations and bogus document. In the loan application process, the misrepresentations included overstating the borrowers' incomes and assets. In addition, Goggin and Kamaras submitted fake documents to support those and other misrepresentations.
The closing documents reflected that the borrowers were making substantial down payments, and that Goggin was not getting any money from the transactions. The sales price reflected the price that the buyer agreed to pay Goggin for the home, and not the price that the seller agreed to sell the property to Goggin for. In addition, the closing documents reflected that the buyers were making substantial down payments associated with the purchase of the properties, when, in fact, they were not making any payments.
Catherine Slane was the co-conspirator who did the closings. In addition to the fraudulent closing documents, Slane also wired funds received from the lender to Goggin. Goggin would then use those funds to obtain a certified check that he would bring back to Slane after the closing falsely evidencing to the lender that the buyers made the down payments.
None of this fraud, however, was possible without fraudulent appraisals that supported the fraudulently elevated sales price shown to the lenders. Sam Shaheen was the appraiser who provided the fraudulent appraisals. Both Shaheen and Kamaras previously pleaded guilty based on their roles in the conspiracy and are awaiting sentencing.
Judge Fischer scheduled sentencing for Slane for Aug. 9, 2013. The law provides for a total sentence of 80 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the criminal history, if any, of the defendant.
The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Slane. 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 Fraud Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; 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.