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 Rachel Dollar is an attorney and Certified Mortgage Banker who handles fraud recovery litigation for lenders and secondary market investors nationwide. She is a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
Mortgage Fraud Blog is co-sponsored by Interthinx the leading provider of fraud services and solutions for the mortgage industry.
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Thursday, May 16, 2002
Hoffman Pleads Guilty to Grand Larceny
Nassau County District Attorney Denis Dillon announced today that a former attorney has pleaded guilty to Grand Larceny in the Second Degree in connection with the theft of more than three-quarters-of-a-million dollars from a mortgage banker who had retained him to act as the settlement agent in the refinancing of a private mortgage transaction.
Douglas Hoffman, 51, of Dix Hills, admitted to stealing approximately $756,000 from United National Mortgage. He pled guilty May 15 before County Court Judge Ira H. Wexner.
According to Dillon, “In April of 2000, Hoffman was retained to be the closing attorney for United National Mortgage LLC (UNM) in a refinancing of a mortgage on real property in Sag Harbor. On May 9, 2000, UNM wired $766,670.21 into Hoffman’s ‘Escrow 1 Account’ at HSBC Bank USA to cover the costs and expenses of the refinance. The primary expenditure was for the satisfaction of the existing mortgage held by Amerifirst Financial in the approximate amount of $756,000.
”Hoffman, however, rather than using these funds for their intended purpose, misappropriated them by using them to pay off shortages he incurred in other, unrelated real estate transactions. In effect, he was engaged in a ‘kiting’ scheme, using funds wired into his account by one mortgage lender for a particular transaction to cover a pre-existing shortage from another transaction with a different lender.”
Hoffman, whose law practice was located in Westbury, also admitted to four other thefts: $111,028.54 from Accredited Home Lenders, Inc., where he similarly received funds while acting as the settlement agent in a real estate transaction, and misused the funds to cover other shortfalls; $50,000 that he was supposed to hold in escrow as down payment in the sale of a commercial business; and $5,000 from one individual and $4,000 from another individual in separate cases also involving real estate transactions. Each of his victims has sought restitution from The Lawyers’ Fund for Client Protection.
Hoffman will be sentenced July 24. He received a commitment from Judge Wexner of 3-9 years in jail. The case was prosecuted by ADA Marshall Trager of the District Attorney’s Special Investigations Bureau.
 mortgage fraud
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