NEW YORK, July 27 (Reuters) - Two New York lawyers were
convicted Thursday of participating in a massive mortgage-fraud
scheme that bilked $25 million from financial institutions and
wholesale mortgage lenders, federal prosecutors said.
Aaron Rabinowitz and Matthew Burstein, both aged 40, were
each found guilty on 10 felony charges, including conspiracy to
commit bank and wire fraud.
The charges followed a nearly two-week trial before U.S.
District Judge Allyne Ross, according to a spokesman for the
U.S. Attorney's Office for the Eastern District.
Rabinowitz and Burstein of Queens were each acquitted on one
count of bank fraud.
The two lawyers were among six individuals charged in 2011
in connection with the long-running scheme.
According to the indictment, the defendants obtained
millions of dollars in mortgage loans from major banks and
lenders by submitting false information on loan applications to
make "straw buyers" appear creditworthy. They also misled
lenders about how much money was disbursed at property closings.
From 2001 until July 2010, defendants raked in commissions
and fees from the mortgages. When the straw buyers stopped
making payments, they defaulted on the loans, costing lenders
millions, the indictment said.
Burstein and Rabinowitz represented buyers and mortgage
lenders in transactions involving the mortgaged properties,
"The defendants violated the trust placed in them as
attorneys and further damaged the integrity of the real estate
market," U.S. Attorney Loretta Lynch said in a statement.
Both men are planning to file post-trial motions for a new
trial, according to a letter filed with the court Friday.
"There was a massive mortgage fraud conspiracy where people
made a lot of money, and these two defendants were not a part of
the conspiracy," said Roger Stavis, an attorney representing
Rabinowitz. "They were only lawyers doing legal work and getting
paid reasonable legal fees."
Burstein and Rabinowitz each face up to 30 years in prison
when they are sentenced on Nov. 26.
The other defendants in the case have pleaded guilty.
The case is U.S. v. Roldan et al., U.S. District Court for
the Eastern District of New York, No. 10-623.
For the U.S.: Matthew Amatruda, Alexander Solomon, Evan
Weitz and Robert Polemeni.
For Burstein: Gregory Cooper.
For Rabinowitz: Roger Stavis, Adam Felsenstein and Pamela
Gallagher of Gallet Dreyer & Berkey.
(Reporting by Jessica Dye)
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