Joanne M. Seeley, 40, formerly of East Berlin, Pennsylvania, has been charged with defrauding 14 mortgage lenders, 35 homeowners and five individual investors in Cumberland, Dauphin, York, and Adams Counties, Pennsylvania, out of approximately $2,700,000 between 2006 and 2008. The defendant appeared before U.S. Magistrate Judge J. Andrew Smyser in Harrisburg, Pennsylvania, on a 10-count indictment charging her with five counts of wire fraud and five counts of unlawful monetary transactions. Each count is punishable by a maximum of 20 years’ incarceration and a $250,000 fine.
Seeley, who now lives in Texas, was a Pennsylvania licensed real estate agent until November 9, 2006, when she surrendered her license in lieu of disciplinary action. Between 2006 and 2008, Seeley was the primary owner and operator of an East Berlin, Pennsylvania-based real estate business known as S&D Property Solutions (S&D).
According to the indictment, Seeley devised and perpetrated a scheme to defraud the victims through the use of false real estate sales contracts, inflated property appraisals, bogus employment verifications, and fictional leases. Seeley would identify a residence scheduled for Sheriff’s Sale and advise the homeowner he/she could avoid foreclosure by selling the home to her or one of her buyers, who would then lease the property back to the homeowner after the sale. Seeley assured the homeowner the sale would allow him to pay off his personal debts, rebuild his credit rating, and allow him to qualify for a new mortgage when he bought back the home, usually one or two years later.
Seeley would tell the buyers of the properties they would be reimbursed for all out-of-pocket expenses, including their down payment, plus a “fee” for engaging in the transaction, at the closing. Seeley also promised the buyers they would receive a monthly rent that would cover most, if not all, of their mortgage payments. Some buyers also received an up front payment designed to make up the difference between their mortgage payment and the rent they received.
Seeley allegedly submitted a plethora of false documents and inflated appraisals to the lenders in order to induce them into making the loans, which eventually caused 14 mortgage lenders to lose approximately $2,500,000. Seeley submitted redacted sales contracts concealing the fact the buyer and seller had entered into buy-back agreements and that the down payment was refunded to the buyer from the loan proceeds. Seeley also submitted false leases to the lenders listing fictitious tenant names and rents.
The Indictment alleges Seeley converted a significant portion of the financing to her own use. When Seeley would purchase the property in her name or the name of a family member,1 she would charge an inflated commission, with the fee ranging anywhere between 17 percent and 57 percent. When Seeley employed a third party to purchase the property, she would simply have the homeowner surrender his sale proceeds check to S&D.
The Indictment also alleges Seeley defrauded five individual investors by selling them real estate “franchises” and promising high rates of return on real estate investments. Instead, Seeley employed a significant portion of the funds to avoid the foreclosure of her personal residence. Together the five investors lost approximately $200,000. Moreover, none of the defrauded homeowners were ever able to buy back their homes.
Judge Smyser released Seeley on supervised release pending trial, which was scheduled for May 2, 2011, before Senior U.S. District Court Judge Sylvia Rambo. The case was investigated by the Harrisburg Office of the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Kim Douglas Daniel.
An indictment or information is not evidence of guilt but simply a description of the charge made by the grand jury and/or United States Attorney against a defendant. A charged defendant is presumed innocent until a jury returns a unanimous finding that the United States has proven the defendant’s guilt beyond a reasonable doubt or until the defendant has pled guilty to the charges.
Seeley purchased 11 of the properties under her name.
Peter J. Smith, U.S. Attorney for the Middle District of Pennsylvania, and George C. Venizelos, Special Agent in Charge, Federal Bureau of Investigation, announced the charges.