Five Face Criminal Charges For Roles In Now-Defunct Upstate NY Sale Leaseback, Equity Stripping Foreclosure Rescue Peddling Operation

In Albany, New York, the Albany Times Union reports:

• A honeymoon in Europe, cruise to Antigua, spa treatments and free rent. It all came about, authorities say, because of a massive mortgage fraud scheme based on Central Avenue in Colonie. And now five defendants -- including a once-disbarred local attorney -- face felony charges from state Attorney General Andrew Cuomo that could send every one of them to state prison.

• They stand charged with taking part in a multi-million-dollar scam in which Rivertown Investments of 1762 Central Ave. allegedly used bogus buyers to dupe banks, lenders, real estate owners and title insurance corporations.

• Kevin P. Wheatley, 37, a Waterford lawyer for the company, was quietly arraigned Thursday before Judge Stephen Herrick in Albany County Court on a 23-count felony indictment accusing him of first-and-second degree grand larceny, scheming to defraud, forgery and falsifying business records. The indictment alleged Wheatley stole property and the proceeds of a mortgage loan exceeding $1 million on April 24, 2007, in Albany County. It stated he committed the same crimes for several other properties in Albany County. All exceeded $50,000. The first-degree grand larceny count alone carries a possible 25-year prison sentence.(1)

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• Rivertown owner Geoffrey Goldman, 34, of Albany faces a possible 15 years behind bars on charges of second-degree grand larceny and falsifying business records. Goldman started the company in 2002.

• Criminal complaints in the case described its actions as follows: Rivertown would solicit homeowners in financial distress to sell their homes to the company. Rivertown, in turn, would lease the homes back to them for a term, usually 18 months. It was under a promise that net equity would be held for downpayment on repurchase of the property.

• But despite promises that Rivertown would purchase the properties, the company allegedly used straw buyers who would obtain properties -- then immediately sign deeds transferring the titles to a Rivertown holding company without notifying lenders or getting their consent. Court papers noted an investigator said one defendant told him the monthly income of straw buyers was grossly inflated on mortgage applications.

• A criminal complaint against Geoffrey Goldman noted that a portfolio for Rivertown showed 105 lease-back properties in New York, Pennsylvania and New Jersey at prices ranging from $112,000 to more than $2.6 million. Closing dates ranged from August 2003 to March 2008. But authorities say in some cases homes were never sold back, customers were evicted and some clients who repurchased homes had to spend thousands of dollars beyond their initial agreement.(2)

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• Wheatley is the only defendant who has been indicted.(3) Complaints show all the other defendants gave interviews with an investigator. A person with knowledge of the case said some defendants, if not all, have agreed to cooperate against Wheatley. Lawyers for the defendants could not be reached.

For more, see Loan fraud probe nets 5.

Thanks to an anonymous reader for the heads-up on the story.

(1) Repotedly, Wheatley, who started working for Rivertown in 2005, previously worked at law firms in Troy and Latham and was disbarred in 2002 by the Appellate Division's Committee on Professional Standards for "dishonesty, fraud, deceit and misrepresentation." Wheatley, who did not initially challenge the allegations, was reinstated in 2005, the story states. Wheatley's prior professional misconduct, which led to his disbarment, included failure to show up at court conferences, hiding files from clients and misrepresenting the status of cases to the court and clients, the story states.

(2) Others charged include:

• Jonathan R. Goldman, 28, of Newburgh, Rivertown vice president and chief marketing officer and an alleged straw buyer, was charged with scheming to defraud;

• Jordan Laccetti, 30, of Saratoga Springs, a loan officer at Rivertown, was charged with falsifying business records. Both face up to four years in prison;

• Jessica Peryea, 27, of Albany, a licensed real estate broker and sales director at Rivertown, who faces a grand larceny charge. Peryea, an alleged straw buyer, faces up to seven years behind bars.

(3) To the extent Wheatley, an attorney, was acting in his capacity as such when allegedly screwing over the victims, the victims may be able to turn to The Lawyer's Fund for Client Protection of the State of New York for recovery of money.

For similar "attorney ripoff reimbursement funds" that cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (directory now includes Canadian funds - courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc.