Kevin M. O’Connell, 35, and Kevin D. O’Connell, 62, both of Albany, New York, were each sentenced in United States District Court, Syracuse, to 24 months incarceration by Senior District Court Judge Norman A. Mordue resulting from a long-term mortgage fraud investigation.
In addition, Kevin M. O’Connell was ordered to pay restitution in the amount of $2,275,584.88 and to pay a forfeiture judgment in the amount of $4,628.886.48. Kevin D. O’Connell was ordered to pay restitution in the amount of $2,136,444.09.
Kevin M. O’Connell was a principal of PB Enterprises and employed his father, Kevin D. O’Connell to assist in a series of transactions that defrauded banks that were offering mortgages in the Albany area. The essence of the fraud was that PB Enterprises found inexpensive properties, usually rental properties that were for sale. They then recruited buyers to purchase the property at higher prices, with promises that the buyer would pay no money down and would instead receive a check at the closing.
In dozens of transactions, PB Enterprises fraudulently obtained mortgages for those purchasers at the higher purchase price by providing false information to the lenders. PB Enterprises then arranged with closing agents to submit documents to the lenders that disguised the fact that the purchase prices were inflated and that the purchaser and the principals of PB Enterprises were splitting the excess mortgage money. The mortgage lender was falsely led to believe that the mortgage proceeds were necessary to purchase the property, and had not been diverted to pay the buyer and PB Enterprises. The restitution figures imposed by Judge Mordue represent the losses suffered by the lenders from this practice.
The principals of another such organization, Team Title, who were engaged in a similar scheme, pled guilty and were sentenced previously in Albany. Another principal of PB Enterprises, Michael Crowley, is scheduled to be sentenced on February 5, 2013, in Syracuse. A closing agent used by PB Enterprises and Team Title, attorney Michael G. Bouchard, was found guilty of conspiracy and bank fraud after trial in Syracuse in December 2012. Bouchard and his two paralegals are scheduled to be sentenced in April 2013.
United States Attorney Richard S. Hartunian and IRS Criminal Investigation Division Special Agent in Charge Toni Weirauch, announced the sentences.
This case is the result of an investigation by the Internal Revenue Service, Criminal investigation Division in Albany, NY. Further questions or inquiries may be directed to Assistant United States Attorney Michael Olmsted, the prosecutor handling the case, at (315) 448-0672.