Edward G. McCusker, 49, Chesterbrook, Pennsylvania, was sentenced to five years in prison for a massive mortgage fraud scheme that resulted in at least 35 fraudulent mortgage loans worth more than $10 million. His wife Jacqueline, 49, New Hope, Pennsylvania, was sentenced to one year of home confinement followed by three years of probation for her role in the crime.
A federal jury convicted the couple on June 22, 2011 of conspiracy to commit mail and wire fraud, conspiracy to commit money laundering, wire fraud and mail fraud. U.S. District Court Judge Mary McLaughlin handed down the sentence. In addition to the prison terms, the McCuskers were ordered to forfeit $400,000; Edward McCusker was order to pay a fine of $12,500, a special assessment of $1,000, and complete three years of supervised release; Jacqueline McCusker was ordered to pay a special assessment of $900.
The McCuskers operated Axxium Mortgage, Inc., along with co-defendant John Bariana who pleaded guilty and is awaiting sentencing. Co-defendants Jeffrey A. Bennett and Stephen G. Doherty, owners of the Doylestown law firm Bennett & Doherty, P.C., also pleaded guilty. Doherty was sentenced to one year and one day in prison; Bennett’s sentencing is scheduled for March 7, 2014.
The defendants targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers, and obtained dozens of fraudulent mortgages. The defendants took whatever equity the homeowner had left, funneled it through shell corporations they controlled, used some of it to pay the new mortgages, and put the rest of the equity into their own bank accounts.
The defendants promised financially distressed homeowners that they would find an “investor” who would help them save their home. The defendants would then either purchase the home themselves or arrange for a straw purchaser to obtain a fraudulent mortgage and then transfer of the title of the homeowner’s residence to the straw purchaser. The McCuskers, along with Bariana, obtained the fraudulent mortgages by submitting false documents to mortgage lenders and making false claims about the purchasers’ finances. The defendants also concealed from the lender the fact that the homeowner was going to continue to reside in the home and that the mortgage payments were going to continue to be made, in part, by the distressed homeowner and funneled through the straw purchaser. Bariana and Jacqueline McCusker each acted as straw purchasers for ten homes. The defendants also recruited at least seven other persons to act as straw owners in order to obtain additional fraudulent mortgages.
Doherty solicited and referred distressed homeowners to Edward McCusker, and used fraudulent bankruptcy filings for some of the distressed homeowners to delay foreclosure until McCusker had obtained an investor and a mortgage. Bennett handled the closings for the real estate transfers, falsifying the settlement statements and manipulating the information provided to the lender in order to hide the nature of the scheme until after the loan was funded.
This case was investigated by the Federal Bureau of Investigation and the Pennsylvania Department of Banking. It is being prosecuted by Assistant United States Attorney Nancy Rue.