Man Sentenced for Participating in 2 Mortgage Scams

Allison Tussey —  November 18, 2011 — Leave a comment

Steven J. Kottage, 45, Weston, Connecticut, was sentenced by United States District Judge Mark R. Kravitz in New Haven, Connecticut, to 41 months of imprisonment, followed by five years of supervised release, for participating in two mortgage fraud conspiracies.

According to court documents and statements made in court, Kottage conspired with his husband, Genaro Hathaway, to commit wire fraud by making materially false statements to H&R Block Home Mortgage, Inc., including a false loan application, W-2, employment verification, and pay stub in connection with a mortgage on a home on Fire Island, New York.  In addition, Kottage and Hathaway conspired to commit bank fraud by submitting a materially false loan application to Washington Mutual to refinance a condominium in Hillsboro Beach, Florida.  A co-defendant, Mary Ellen Durso, served as the straw owner for the condo in order to obtain the fraudulent loan proceeds for the benefit of Kottage and Hathaway.  Through both schemes, Kottage and Hathaway defrauded Wells Fargo and Freddie Mac of more than $600,000.

On April 21, 2011, Kottage pleaded guilty to two counts of conspiracy stemming from these schemes.  On April 29, 2011, Hathaway pleaded guilty to two counts of conspiracy and one count of tax evasion.  He awaits sentencing.

On December 14, 2010, Durso pleaded guilty to one count of conspiracy and five counts of filing false tax returns.  On March 9, 2011, she was sentenced to three years of probation, the first six months of which she must serve in home confinement.

David B. Fein, United States Attorney for the District of Connecticut, announced the sentence.

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service ““ Criminal Investigation.  The case is being prosecuted by Assistant United States Attorney David T. Huang and Senior Litigation Counsel Richard J. Schechter.

In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut.  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 email to

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.

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Allison Tussey

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