Michael David Scott, 51, Mansfield, Massachusetts, a former real estate agent/developer and two out-of-state recruiters pleaded guilty to wire and bank fraud charges in connection with a multi-year, multi-property mortgage fraud scheme in Boston, Massachusetts.
The defendant pleaded guilty to 32 counts of wire fraud, 13 counts of bank fraud, and 22 counts of money laundering; Jerrold Fowler, 31, and Thursa Raetz, 40, both of Norfolk, Virginia, pleaded guilty to two counts of wire fraud. U.S. District Court Judge Richard G. Stearns scheduled Scott’s sentencing for Aug. 26, 2015, and Fowler and Raetz’s sentencings for Sept. 2, 2015.
From September 2006 to April 2008, Scott, a former real estate agent and developer, arranged to purchase multi-family residences and then sold individual condominium units in the buildings to straw buyers recruited by him, Fowler and Raetz. The defendants fraudulently recruited straw buyers to purchase condominium units in Roxbury and Dorchester with promises that the buyers would not have to make down payments, pay any funds at the closing, or be responsible for mortgage payments, but would share in profits when the units were resold.
To obtain mortgage loans in the names of the straw buyers, Scott, Fowler, and Raetz submitted mortgage loan applications that falsely represented key information, such as the buyers’ income, personal assets, down payment, and intention to reside in the condominiums. The mortgage lenders (nine national mortgage companies and one local bank) were led to believe that the straw buyers had made substantial down payments and paid substantial sums at closings.
The charge of bank fraud provides a sentence of no greater than 30 years in prison, five years of supervised release, and a fine of $1 million on each count. The charge of wire fraud provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 on each count. The charge of money laundering provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Victor A. Wild of Ortiz’s Economic Crimes Unit and Ryan M. DiSantis of Ortiz’s Public Corruption Unit.