Man Admits Role in Real Estate Fraud Schemes, Obstructing Justice

Allison Tussey —  January 14, 2014 — Leave a comment

Thomas Provenzano, 47, Torrington, Connecticut, waived his right to indictment and pleaded guilty before U.S. District Judge Janet Bond Arterton in New Haven to multiple conspiracy offenses stemming from his involvement in a series of fraudulent real estate transactions.

According to court documents and statements made in court, in November 2005, Provenzano obtained a $923,200 loan to purchase a lakefront home located at 27 Palmer Road, Morris, Connecticut, for more than $1.1 million, despite lacking the income and savings to pay off the mortgage. The property was owned by an entity controlled by a co-conspirator, and, on the mortgage loan application, Provenzano falsely listed his employment with a company owned by his co-conspirator. In fact, Provenzano never worked at the company. The application also falsely listed Provenzano’s income as $20,000 per month when, in fact, his annual income was less than $50,000. The company subsequently provided verification for the false employment and income information on the loan application.

In November 2006, Provenzano refinanced the loan, obtaining a $936,000 mortgage from a federally insured bank. The new loan application, like the prior application, falsely listed Provenzano as employed by the same company as in the original loan application and falsely listed his monthly income as $28,000, equal to $336,000 annually. The company again provided verification for the false information on the loan application.

The loan is now in default, and the Palmer Road property is now in foreclosure.

In May and June 2010, Provenzano and the same co-conspirator learned that the FBI and IRS were investigating the real estate and mortgage transactions involving the Palmer Road property. Among other things, the federal agents were examining a discrepancy in the closing documents, which showed that Provenzano had been obligated to make a down payment of approximately $249,000 but had never paid it. Provenzano and his co-conspirator met and created a false promissory note in the amount of approximately $249,000 and backdated the note to November 2005 to serve as an explanation of why the $249,000 down payment had never been paid at the closing. In June 2010, Provenzano agreed to be interviewed by the FBI and IRS. During the interview, he falsely claimed that he had not needed to make the down payment in November 2005 because he had signed a promissory note to the seller for the same amount. Later that same month, Provenzano met with the FBI and IRS agents and provided them with a copy of the false, backdated promissory note.

As part of a separate conspiracy, in December 2009 and January 2010, Provenzano, the same co-conspirator, and others engaged in a series of discussions about how to defraud a title insurance company. According to the discussions, the scheme involves a real property sale based on a deliberately defective title search, where one or more liens on the property are deliberately omitted from the title search report. After the property is sold and title insurance is issued, the conspirators arrange an event that triggers a new title search, such as a resale of the property. The “overlooked” liens turn up, providing the conspirators with a legal claim against and a large payout from the title insurer.

The conspirators attempted the scheme on a property held in the name of an entity controlled by Provenzano’s co-conspirator located at 66 Donahue Road Extension, Litchfield, Connecticut. Provenzano assisted in a title search of the property in January 2010 but then ceased to participate in the scheme. The property was later sold in March 2010 to his co-conspirator’s brother, and title insurance was issued based upon a defective title search. Three liens against the property, totaling approximately $990,000, had been deliberately omitted from the title search report.

Provenzano pleaded guilty to one count of conspiracy to commit bank fraud, one count of conspiracy to obstruct justice, and one count of conspiracy to commit mail and wire fraud. Judge Arterton scheduled sentencing for April 14, 2014, at which time Provenzano faces a maximum term of imprisonment of 55 years.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced the guilty plea.

This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Henry Kopel.

Allison Tussey

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