Brendan Bolger, 41, Chicago, Illinois, was sentenced to two years in federal prison for conspiracy to commit bank, wire, and mail fraud in connection with a Condo Conversion Scheme. The Court also entered a forfeiture money judgment in the amount of $13,641,197.90, which represents the fraud perpetrated on the mortgage lenders. Bolger pleaded guilty on August 20, 2014.
According to court documents, in 2005, entities controlled by co-conspirators entered into a contract to purchase The Arbors, an apartment complex in Hillsborough County, Florida. The new owners of The Arbors then engaged in a plan to convert the complex from rental apartments to condominiums. The developers financed their purchase of The Arbors with a loan from Corus Bank, a financial institution whose deposits were insured by the FDIC. The Corus loan agreement set forth substantial financial penalties for the developers if they failed to satisfy the loan requirements.
Bolger aided the developers in the sale of numerous condominiums at The Arbors through his company, Capital Management Guarantee, LLC. In order to induce buyers to purchase condominiums at The Arbors, Bolger created an addendum to the purchase contract that offered buyers various incentives such as rental supplements, money to defray maintenance costs, and a design credit to upgrade the condominium’s amenities. When the buyers cancelled the design credit within 10 days of signing the addendum, Bolger paid a kickback for the amount of the design credit to the buyer from Capital Management’s bank account. In this manner, Bolger and other co-conspirators failed to disclose to both Corus Bank and to the purchasers’ mortgage lenders material facts about the financing of the sale of the condominiums.
The Condo Conversion Scheme was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency – Office of Inspector General. It was prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay Hoffer.