William Buchko, 59, New Brighton, Pa., pleaded guilty in federal court before United States District Judge David Cercone to one count of bank fraud.
In connection with the guilty plea, the court was advised that Buchko, who is an attorney specializing in real estate transactions, participated in a bank fraud scheme related to a property in Coraopolis, Pa., in June 2009. Some years earlier, co-conspirators purchased the property under the corporate name SPO Capital, LLC. In June 2009, a co-conspirator applied for the loan through Wesbanco Bank falsely representing that Eloheh Group LLC, which was owned by co-conspirators, had purchased the property from SPO Capital in January 2009. The loan was to refinance so that Eloheh Group could get cash. It was represented that Eloheh Group had paid $3.2 million for the property and had made a cash down payment of approximately $750,000.
In reality, however, Eloheh Group had not purchased the property in January 2009. In terms of successfully applying for a refinance loan, it is important to establish what is called in the industry as “seasoning.” Borrowers cannot typically purchase a property one month and then refinance the loan the next month. Banks want to see a history of payments made on the loan.
In order to convince the bank of this fraudulent January sale, Buchko create false documents evidencing the January sale. Those fraudulent documents included a settlement statement and a deed. These false documents were submitted to the bank in support of the loan application.
Judge Cercone scheduled sentencing for April 6, 2011. The law provides for a total sentence of 30 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
United States Attorney David J. Hickton announced the guilty plea.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Buchko. 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.