Legal Industry News
August 3, 2012
Two Queens, New York Attorneys Convicted of $25 Million Mortgage Fraud But Will Seek New Trial
A federal jury in Brooklyn has returned a verdict convicting attorneys Matthew Burstein and Aaron Rabinowitz on ten felony counts for participating in a mortgage fraud scheme that resulted in over $25 million in fraudulently-obtained loans from Countrywide Financial, Fremont Investment and Loan, IndyMac Bank, Sun Trust Mortgage, Inc., Wells Fargo & Company and New Century Mortgage Corporation.
A lawyer for Rabinowitz later said that he will seek new trial, stating that the two attorneys were innocent since they were merely extending legal services as part of their duties as counsel.
The convictions were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Janice K. Fedarcyk, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office, and Jon T. Rymer, Inspector General, Federal Deposit Insurance Corporation.
During a seven-day trial, the government’s evidence established that, from January 2006 to September 2008, the defendants, partners at the law firm Burstein & Rabinowitz located in Forest Hill, Queens, worked as attorneys at real estate closings for fraudulent home sales in New York City.
The defendants, who would act as both the bank settlement attorneys and the buyers’ attorneys at the closings, worked with co-conspirator real estate agents and loan officers to falsify loan documents in order to induce banks to give mortgage loans for properties located in Queens, Brooklyn and Long Island.
Many of the properties were purchased by “straw buyers” who had been recruited by the co-conspirator real estate agents and loan officers to purchase the properties. In many instances the straw buyers subsequently failed to make mortgage payments to the lending institutions, and as a result millions of dollars of loans are now in default. The defendants profited by paying themselves attorneys’ fees from the mortgage loan proceeds.
“The defendants violated the trust placed in them as attorneys and further damaged the integrity of the real estate market,” stated United States Attorney Lynch. “We will vigorously investigate and prosecute those who engage in mortgage fraud, including professionals who jettison their responsibility to reap rewards from the fraud.” Ms. Lynch extended her grateful appreciation to the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation.
The indictment unsealed on October 5, 2011 alleges the attorneys, along with four other individuals, conspired to defraud financial institutions, including Countrywide Financial, Fremont Investment and Loan, IndyMac Bank, National City Corporation, Sun Trust Mortgage, Inc. and Wells Fargo & Company, and wholesale mortgage lenders, including Lend-Mor Mortgage Bankers Corporation, Mortgage Lenders Network USA and New Century Mortgage Corporation.
Attorneys Burstein and Rabinowitz, real estate agent Elias Compres, loan officers Arturo Giraldo and John Constantanides, together with Rolando E. Roldan, are charged with conspiracy to commit bank and wire fraud; Burstein, Compres, Rabinowitz and Roldan are also charged with wire fraud.
Sentencing is scheduled for November 26, 2012. The maximum term of imprisonment for conspiracy to commit bank and wire fraud is 30 years. The government is also seeking an restitution from the defendants and forfeiture of the criminal proceeds, including a criminal forfeiture money judgment in the amount of proceeds traceable to the offenses.
The government’s case was prosecuted by Assistant United States Attorneys Matthew S. Amatruda and Robert T. Polemeni.
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