Warren Jay Knaust, 62, St. Petersburg, Florida, to 30 months in federal prison for conspiracy to commit wire fraud affecting a financial institution.
The court also ordered Knaust to pay restitution to the victim lenders in the amount of $1,907,495.32 and to forfeit $26,042.95, which is traceable to proceeds of the offense. Knaust pleaded guilty on August 6, 2010.
According to court documents, Knaust conspired with Christopher Alan Stapleton and William Craigo Straub, Jr., to defraud mortgage lenders by submitting loan applications and other documents containing false and fraudulent information. Specifically, Stapleton falsely inflated both the contract purchase prices of the real properties that he was buying and his own gross monthly income in an effort to get lenders to approve the loans. Straub, a former mortgage broker, submitted the fraudulent loan applications to the victim lenders.
Knaust, an attorney who acted as the title agent, prepared fraudulent closing documents and submitted them to the victim lenders. Relying on these fraudulent representations, the lenders approved the loans and disbursed loan proceeds in excess of the true contract purchase prices. Stapleton paid the contract amounts to the sellers and, unbeknownst to the lenders, pocketed millions of dollars in excess loan proceeds.
Stapleton is awaiting sentencing. Straub was sentenced to one year and 9 months in prison.
U.S. Attorney Robert E. O’Neill announced the sentencing by U.S. District Judge Richard A. Lazzara.
This case was investigated by Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorneys Rachelle DesVaux Bedke and