NEW YORK, Oct 5 (Reuters) - Lawyers, loan officers and a real-estate agent were among six individuals charged Wednesday with running a massive mortgage-fraud scheme that bilked $25 million from financial institutions and wholesale mortgage lenders, federal prosecutors said.
Six individuals will be arraigned later Wednesday in Brooklyn federal court in connection with the long-running scheme, according to the U.S. Attorney's Office for the Eastern District of New York. Each faces up to 30 years if convicted on the charges, which include conspiracy to commit bank and wire fraud.
"For almost a decade, these defendants allegedly used a trail of false documents and broken promises to enrich themselves to the tune of millions," Loretta Lynch, U.S. Attorney for the Eastern District of New York, said in a statement.
Among the defendants are New York attorneys Matthew Burstein, 40, and Aaron Rabinowitz, 40, who represented buyers and mortgage lenders in real-estate transactions involving some of the properties in question, prosecutors said.
Their co-defendants include loan officers John Constantanides, 39, and Arturo Giraldo, 41, who allegedly submitted fraudulent mortgage applications to lenders.
Rolando Roldan, 35, and real-estate agent Elias Compres, 52, were accused of recruiting straw buyers to pose as purchasers of the properties.
An attorney representing Roland, who was previously indicted for a related mortgage fraud in 2010, did not immediately return a call for comment. Counsel for the remaining defendants could not be immediately identified early Wednesday.
NINE-YEAR SCHEME ALLEGED
According to a superseding indictment, the defendants obtained millions in mortgage loans from banks and other mortgage lenders by submitting false information on loan applications to make recruited borrowers seem more credit-worthy than they were.
They also trumped up other documents that deceived lending institutions about how much money was disbursed at closings on the properties, located primarily in the New York borough of Queens, prosecutors said.
From 2001 until July 2010, the defendants raked in commissions and loan fees from the mortgages, prosecutors said. But when borrowers stopped making payments, their loans went into default, costing lending institutions millions, according to the indictment.
Lending institutions hit by the fraud include JP Morgan Chase's Chase Home Finance, Countrywide Financial, Fremont Investment and Loan, IndyMac Bank, National City Corporation, Sun Trust Mortgage Inc and Wells Fargo & Co, prosecutors said.
Wholesale mortgage lenders including Lend-Mor Mortgage Bankers Corporation, Mortgage Lenders Network USA and New Century Mortgage Corporation also lost money in the scheme, according to the indictment.
The case is U.S. v. Burstein et al, in the U.S. District Court for the Eastern District of New York, no. 10-623.
For the U.S.: Assistant U.S. attorney Alexander Solomon.
For Roland: Dawn Cardi of Dawn Cardi & Associates.
(Reporting by Jessica Dye)
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