Henry J. Papale, 60, Southington, Connecticut, was indicted by a federal grand jury sitting in New Haven, Connecticut, on eight counts of wire fraud and four counts of money laundering stemming from an alleged mortgage fraud scheme involving four properties in Florida.
The superseding indictment alleges that, in 2007, Papale persuaded two individuals to use their names and credit information to purchase four homes in Florida, purportedly as legitimate investments. Papale also obtained mortgage financing using the names and credit information of the two individuals. The following properties were involved in the scheme:
537 Gleneagles Circle, Davenport, Florida; 702 Calabria Avenue, Davenport, Florida; 7783 Basnett Circle, Kissimmee, Florida; and 478 Belfry Circle, Daveport, Florida.
The indictment further alleges that Papale submitted to the Florida settlement agent fraudulent invoices and work authorizations, which purported to be from a construction company for restoration on the properties, along with wire transfer instructions. In fact, the construction company was fictitious and no work was performed on the properties.
Following the closing on each property, the settlement agent, at Papale‘s direction, transferred loan proceeds corresponding to the fictitious construction company’s price for restoration work, in the total amount of $360,307.23, to the Connecticut bank account of an individual known to Papale. That individual then turned the majority of the fraudulently obtained loan proceeds over to Papale, who deposited them into his own bank account. Papale then transferred $255,500 in funds from his bank account to an investment trading account.
It is alleged that Papale did not make the mortgage payments due on the Florida properties, resulting in delinquencies on the properties’ mortgages.
If convicted, Papale faces a maximum term of imprisonment of 20 years on each count of wire fraud, and a maximum term of imprisonment of 10 years on each count of money laundering.
The superseding indictment was returned on January 30, 2012. As previously reported by Mortgage Fraud Blog, Papale was originally charged with two counts of wire fraud in an indictment that was returned on September 29, 2011.
The case is assigned to Senior United States District Judge Ellen Bree Burns in New Haven.
David B. Fein, United States Attorney for the District of Connecticut, announced the Indictment.
U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Special Assistant United States Attorney Jonathan N. Francis and Assistant United States Attorney Michael S. McGarry.
Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an e-mail to firstname.lastname@example.org.
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service-Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.