Loan Officer Pleads Guilty to Fraud Charges

Allison Tussey —  April 13, 2010 — Leave a comment

Daniel Gillen, 42, Mt. Lebanon, Pennsylvania, pleaded guilty in federal court to charges of wire fraud conspiracy, money laundering conspiracy, and tax evasion in connection with a mortgage fraud scheme.

Gillen pleaded guilty to three counts before United States District Judge Joy Flowers Conti.

In connection with the guilty plea, Assistant United States Attorney Brendan T. Conway advised the court that Gillen was a loan officer for several different mortgage broker companies who submitted fraudulent loan applications and supporting documents that misrepresented borrowers’ income and assets. He also conspired with Kenneth Cowden, who, as part of the conspiracy, prepared fraudulent appraisals for Gillen and others that overstated the true values of the properties serving as collateral for the loans. Gillen, even though he was not a licensed appraiser, also prepared fraudulent appraisals as part of the conspiracy that overstated the true values of the properties serving as collateral for the loans.

Gillen also laundered money in connection with the mortgage fraud scheme by reinvesting profits from the scheme back into the scheme. In addition, Gillen filed false tax returns that understated his income and engaged in other activities designed to evade his tax obligations.

Judge Conti scheduled sentencing for August 20, 2010. The law provides for a total sentence of 45 years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.

Acting United States Attorney Robert S. Cessar announced the guilty plea. 

The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Gillen. The Mortgage Fraud Task Force is comprised of investigators from federal, state, and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff’s Office; the Pennsylvania Attorney General’s Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee’s Office.

Mortgage industry members with knowledge of fraudulent activity are encouraged to call the Mortgage Fraud Task Force at (412) 894-7550. Consumers are encouraged to report suspected mortgage fraud by calling the Pennsylvania Attorney General’s Consumer Protection Hotline at (800) 441-2555.


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Allison Tussey

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