Federal Judge Nails NYC Foreclosure Rescue Operator With 10 Year Sentence For Role In Equity Stripping Scam

In New York City, Reuters reports:

• A New York man was sentenced on Wednesday to 10 years in prison and will forfeit $2.5 million for his part in a home foreclosure "rescue" scheme targeting distressed homeowners. The case, which exemplified the easy credit and "no document" loans at the heart of the U.S. mortgage crisis, involved a scam that ran from November 2003 through April 2005 in the New York City boroughs of Brooklyn and The Bronx.

• Mary Banks, one of the victims of the scheme, told the U.S. District Court in Manhattan on Wednesday that she had put her life's work into her house since 1958 and was "still fighting to stay in my premises." She said defendant Maurice McDowall, who pleaded guilty in June to charges of conspiracy to commit bank and wire fraud, "deserves any misery he has put on us."

• Other victims told the court how they trusted McDowall to help them avoid foreclosure but fell foul of the scheme. McDowall, 49, said he was sorry for the crime and told the court, "While I was committing the crime we were all in the pot. Whatever we decided to do to save the home we did together."

• In sentencing McDowall, U.S. Judge Robert Patterson also ordered him to pay $100,000 restitution. The forfeiture of $2.5 million was part of his plea agreement. Another defendant Aleksander Lipkin also pleaded guilty in June. He agreed to forfeit $7 million and faces up to 30 years in prison when he is sentenced on October 10. Six people in all were indicted in December last year with fraudulently obtaining titles to scores of homes and taking out bad bank loans against them worth more than $20 million.

For more, see Judge hands 10-year sentence for foreclosure scam.

For the original indictment, see U.S. vs. McDowall, et al.

Go here for other posts on foreclosure rescue operator Maurice McDowall.

Go here for other criminal prosecutions of foreclosure rescue operators.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).