4 'Officers of the Court' Charged in Mortgage Fraud

8 arrested in alleged mortgage scam
The Journal News by Rebecca Baker - August 26, 2009
rebaker@lohud.com

Eight people, including four lawyers, face charges in an alleged mortgage scheme that defrauded four Westchester County families and two mortgage lenders of $1.4 million. The three-year scheme targeted vulnerable people living in Croton-on-Hudson, Yorktown, Cortlandt and Mount Vernon who were about to lose their homes, authorities said. The victims lost their homes and were evicted or are now fighting eviction proceedings. The arrests followed a nine-month probe by the Westchester County District Attorney's Office and the state Banking Department.

Prosecutors say the scam went like this: The defendants found their victims through notices of public auction or foreclosure. They reached out to the cash-strapped homeowners and gained their trust, saying they could transfer the deed to an investor, who would hold the title for 12 to 24 months so they could save money and reclaim their home. But once the "investor" took title, phony checks were presented to the lenders for much higher amounts than what the straw buyer paid for the home. Those checks allowed the group's members to get inflated mortgages, which they used to pay off the original mortgage and keep the remainder for themselves. "The whole purpose of this scheme was to line their pockets," Westchester Assistant District Attorney Brian Conway said. "These transactions were doomed to fail, and they did fail." With the homes stripped of their equity, the former owners were left with nothing. They have filed civil lawsuits to try to reclaim what they lost, prosecutors said. “These are serious financial crimes,” District Attorney Janet DiFiore said. “These crimes have the potential to destroy entire neighborhoods.” Prosecutors alleged that:

• Doreen Swenson, 60, and Hubert "Phil" Hall, 62, a married couple from Tarrytown, helped set up the phony mortgages as principals of the Doran Group. According to the indictment unsealed yesterday, Hall told authorities that he was aware they were in trouble and that he would plead guilty to avoid jail. Hall is a former editor at a precursor to The Journal News.
• Amerigo DiPietro, 59, of Brewster, who owned Interstate Monetary Concepts in Briarcliff Manor, acted as a mortgage broker. Wilma Shkreli, 32, of Westwood, N.J., also known as Wilma Gecay, worked for IMC and posed an an investor.
• Attorneys David Reback, 67, of Rye Brook and Eileen Potash, 52, of Queens represented the Doran Group.
• Attorneys Mildred Didio of Manhattan and Frank Corigliano of Newtown, Conn., both 44, represented the straw buyers or acted as settlement agents for the lenders.

The defense lawyers for the real estate attorneys said their clients were paid a standard rate of $750 to $1,500 for each closing and didn’t make any extra money on the alleged scheme. "This is like the gang that couldn't shoot straight," said Reback's lawyer, former Rockland County District Attorney Kenneth Gribetz. The group received $437,750 in loan money from a Mount Vernon home scam in December 2004; $240,000 from a Cortlandt home in June 2005; $348,000 from a Yorktown home in March 2006; and $373,600 from a Croton home in January 2007. Argent Mortgage Co. and Fremont Investment and Loan were the lenders. Westchester County Judge Barbara Zambelli set bail amounts at $25,000 to $200,000 for the defendants. Six of them were making arrangements with bail bondsmen after their arraignments. The Tarrytown couple were unable to make bail, however, and were led out of court in handcuffs. The lawyers were ordered to return to court Sept. 8. Their clients face up to five to 15 years in state prison on the top count. Meanwhile, DiFiore urged Westchester residents who think they or their relatives were victims of mortgage fraud to call 914-995-3460.