Former Countrywide Loan Officer and Former Corrections Officer Convicted on Mortgage Fraud Charges

On Friday, April 18th, two men were convicted for their roles in an extensive mortgage fraud scheme that included the fraudulent purchase of over 40 properties in New Haven, Connecticut.

Andrew Constantinou, of Unionville, Connecticut, and Jacques Kelly, of Poughkeepsie, New York, were convicted on all federal charges after a three-week trial, including conspiracy to commit mail, wire, and bank fraud. The jury also found Kelly guilty of one count of wire fraud and one count of making a false statement to a financial institution.

The mortgage fraud scheme spanning 2006 to 2008, Constantinou, Kelly, and several other defendants conspired to defraud mortgage lenders of millions of dollars, by inflating the contract price so that buyers asked for larger loans to purchase property. The lenders, usually banks and credit unions, and the property sellers were not informed about the different in price. In many of the fraudulent transactions, the buyers did not make any deposits or down payments.

Constantinou, Kelly, and their co-conspirators submitted false HUD-1 forms to lenders, and kept a separate HUD-1 form that actually represented the property. They also submitted fictitious leases and other false information to support the fraudulent loan.

Constantinou, 57, was a loan officer at GMAC Mortgage from 2006 to 2007 and at Countrywide Home Loans from 2007 to 2008. As part of the mortgage fraud scheme, he received commissions from fraudulent loans, and did not disclose the existence of the inflated contract prices or fraudulent loan documents. Kelly, 48, was a corrections officer for the Westchester County Department of Corrections in New York. From December 2006 to May 2007, Kelly purchased 8 multi-family properties in New Haven, and attempted to purchase a 9th. However, Kelly reportedly paid no money to purchase the properties, and received $56,000 for his fraudulent closings.

Almost all of the properties involved in the mortgage fraud scheme have gone into foreclosure, leaving the lenders with $7 million in losses.

Constantinou will be sentenced on July 15th, 2014. He faces a sentence of up to 30 years in prison. Kelly will be sentenced the day before, on July 14th, and he faces a maximum potential penalty of 30 years for conspiracy, 20 years for wire fraud, and 30 years for making a false statement.

Mortgage Fraud Charges in South Carolina

Mortgage fraud is the misrepresentation of information or the omission of information on a mortgage application in order to obtain a loan or obtain a higher loan offered by the lender had they known the truth.

While “flipping” properties is legal, it becomes illegal when a nominee or straw buyer buys the property.  A nominee/straw buyer is one who buys the property for another person because the other person already has loans out on other property. If the nominee/straw buyer defaults on the mortgage, which was the case for many with the downturn of the economy, the investor may face charges of fraud for using deception to obtain the loan.

Mortgage fraud is a serious offense with stiff penalties. If convicted of mortgage fraud, you could face upwards to 30 years in prison and harsh penalties.

The Strom Law Firm Can Help with Mortgage Fraud Charges

At Strom Law Firm, LLC, our federal criminal defense attorneys provide comprehensive legal services designed to protect your rights and your interests. Our lawyers are licensed in South Carolina, New York, and Georgia. Even if you feel your involvement in themortgage fraudscheme was minor, you may still face charges. We understand what is at stake, which is why we will fight aggressively for your name and your reputation. Call the South Carolina Criminal Defense Lawyer at the Strom Law Firm today for a free case evaluation. 803.252.4800.