Man Admits Laundering Mortgage Fraud Proceeds

Allison Tussey —  August 19, 2013 — Leave a comment

Henry J. Papale, 62, Southington, Connecticut, pleaded guilty before Senior United States District Judge Ellen Bree Burns in New Haven to federal wire fraud and money laundering offenses stemming from a mortgage fraud scheme.

According to court documents and statements made in court, in 2007, Papale used credit information of others to purchase four homes in Florida and obtain mortgage loans. He submitted fraudulent invoices, work authorizations, and wire transfer instructions to a settlement agent in Florida, each of which purported to be from a construction company for restoration on the properties. In fact, the construction company was fictitious, and no work was performed on the properties.

Following the closing on each property, the settlement agent wire transferred loan proceeds, in amounts that corresponded to the price for restoration work, to a bank account in Southington that it believed belonged to the fictitious construction company but was actually held by certain of Papale’s family members. A total of $360,307.23 was transferred to Papale’s family members in this manner.

Based on Papale’s representations, a member of Papale’s family then turned the majority of the fraudulently obtained loan proceeds over to Papale, who deposited them into his own bank account. Papale transferred $255,500 in fraudulently obtained loan funds from his bank account to an investment trading account.

Papale pleaded guilty to one count of wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of money laundering, which carries a maximum term of imprisonment of 10 years. Judge Burns has scheduled sentencing for November 5, 2013.

Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced the guilty plea.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Jonathan N. Francis and Michael S. McGarry.

Allison Tussey

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