Leon Gelfgatt, 49, a Marblehead, Massachusetts attorney, is charged for his role in a million dollar mortgage hijacking scheme. Gelfgatt is charged with Attempted Larceny, and Uttering (2 counts). Gelfgatt entered a plea of not guilty and was ordered held on $1 million cash bail . In the event that Gelfgatt posts bail, he has to surrender his Russian passport and wear an electronic monitoring bracelet.
Gelfgatt was arrested as he allegedly attempted to retrieve over $1.3 million dollars in payoff checks of mortgage funds in connection with a sophisticated mortgage fraud scheme. Gelfgatt allegedly used false documents to create the appearance that mortgages on several Massachusetts properties which were scheduled for impending sale had been transferred to a fake company allegedly created by Gelfgatt. Gelfgatt allegedly did this in order to obtain the payoff funds sent by real estate closing attorneys when the properties were sold.
According to authorities, Gelfgatt allegedly identified properties which were under agreement and scheduled for an imminent sale. He then allegedly recorded false documents at the Registry of Deeds indicating that his fake company was the new holder of any mortgages on those properties. He allegedly sought through this scheme to cause mortgage payoff funds to be delivered to the fake company, rather than to the rightful mortgage holders.
This arrest is the result of an intensive and ongoing investigation utilizing state-of-the art tools and techniques into fraudulent assignments recorded at several Registries of Deeds within Massachusetts. At this time, investigators believe that Gelfgatt may have fraudulently reassigned numerous other mortgages. The case is being prosecuted by Division Chief James O’Brien and Assistant Attorneys General Margaret Parks and Andrew Doherty, all parts of Attorney General Coakley’s Corruption and Fraud Division. The case is being investigated by members of the Massachusetts State Police assigned to the Attorney General’s Office as well as James McFadden of the Financial Investigation Unit.