Bradford J. Rieger, 56, Woodbridge, Connecticut waived his right to indictment and pleaded guilty to one count of conspiracy to commit mail fraud, wire fraud and bank fraud. The charge stems from Rieger’s role as a closing attorney in a multimillion dollar mortgage fraud scheme in New Haven, Connecticut.
According to court documents filed in this case and related cases, between approximately 2006 and 2008,Rieger, who had offices in East Haven, Connecticut along with Ronald E. Hutchison, Menachem Levitin and others, conspired to defraud mortgage lenders and financial institutions by obtaining millions of dollars in fraudulent mortgages for the purchase of dozens of multi-family properties in New Haven, Connecticut. As part of the scheme, sellers of the properties agreed to accept sale prices that were significantly lower than the contract prices. The lower prices were not disclosed to lenders from which the buyers obtained financing to purchase the properties, and scheme participants submitted to mortgage lenders false HUD-1 forms that often did not match another, undisclosed HUD-1 form that was actually used to disburse the fraudulently obtained proceeds at the closing. As a result of the submission of the false HUD-1 forms and other false documentation in support of the loans, including falsified monthly rental income and fictitious leases, the mortgage lenders would issue mortgages based on the inflated sales price.
Scheme participants used the fraudulently obtained mortgage proceeds to pay themselves and others.
In most of the fraudulent transactions, the buyers did not make any deposits or down payments for the properties they purchased. Rather, the co-conspirators used some of the fraudulently obtained mortgage proceeds to cover the down payments and deposits. In addition, at or shortly after a closing, a borrower would often receive several thousand dollars, although this payment was not disclosed to the lender.
Rieger acted as a closing attorney in approximately 19 fraudulent transactions. In connection with many of these closings, Rieger prepared false HUD-1 forms that were submitted to lenders. In some of these transactions, while the HUD-1 form that Rieger sent to the lender indicated that the borrower brought funds to the closing, Rieger actually distributed funds to the borrower.
In total, more than $10 million in fraudulent mortgages on more than 40 properties were obtained during the conspiracy. Many of the houses purchased during the scheme went into default and have been foreclosed upon, causing losses of more than $7 million to lenders.
David B. Fein, United States Attorney for the District of Connecticut made the announcement.
United States District Judge Janet C. Hall has scheduled sentencing for October 4, 2012, at which time Rieger faces a maximum term of imprisonment of 30 years and a maximum fine of approximately $20 million. As part of his plea agreement, Rieger agreed to pay at least $2.2 million in restitution.
Hutchison and Levitin also have pleaded guilty and await sentencing.
This case is being investigated by the Federal Bureau of Investigation, the United States Postal Inspection Service, the U.S. Department of Housing and Urban Development ““ Office of Inspector General, and the Federal Housing Finance Agency ““ Office of Inspector General. The criminal case is being prosecuted by Assistant United States Attorney David T. Huang, and the parallel civil forfeiture cases are being handled by Assistant United States Attorney Julie G. Turbert.