Tuesday, March 8, 2011

Sale Leaseback Peddler Starts "Singing" To NH Feds After Copping Guilty Plea In Equity Stripping, Foreclosure Rescue Conspiracy

In Concord, New Hampshire, the Nashua Telegraph reports:

  • Having lost their home to a refinancing swindle several years ago, Jonathan and Jan May came to U.S. District Court on Tuesday to see whether the criminal justice system might offer any consolation or, better yet, restitution. What they found was a judge and lawyers who see banks and mortgage companies as the scam’s principal victims.

  • However, the Mays were able to see and hear the Nashua real estate agent to whom they had entrusted their financial future declare himself a convicted felon. Richard Winefield, 32, of 6 Short Ave., Nashua, attained that status shortly after 10 a.m. Tuesday, with three words: “Guilty, your honor.”

  • Winefield was part of broader criminal conspiracy, whose members defrauded lenders and homeowners around New Hampshire, Assistant U.S. Attorney Michael Gunnison told Judge Steven McAuliffe.

  • They sought out homeowners who were having trouble making mortgage payments and offered a deal: Winefield and his cohorts would buy the property and take over the payments. The homeowners would pay rent and would contract to buy back their homes at a higher price a few years hence, when they regained financial footing.

  • What the homeowners didn’t know is that Winefield and his co-conspirators were then flipping the properties. They would use inflated appraisals and bogus buyers and take out much larger mortgage loans, helping themselves to the difference after paying off the original mortgage.

  • It’s commonly referred to as an equity-stripping scheme,” Gunnison said, and not one of the homeowners ever got the chance to buy back his or her property.


  • Winefield admitted Tuesday to a single count of mail fraud, for using the mail to send fraudulent loan applications. It is clear that Winefield is but the first to fall: Gunnison has said the Winefield joined a scheme that was already in progress for at least a year, and before the hearing, Gunnison was heard to mention the name “Prieto” while speaking with an investigator in the courtroom.

  • Winefield set up limited liability companies in association with both Michael Prieto and Walter Bressler III, both of whom were named in a 2007 “cease and desist” order by the New Hampshire banking commissioner. Winefield was not named in that case, but it involved similar allegations, and Prieto and Bressler were ordered to repay eight different homeowners and refrain from any further involvement in home financing.

  • After Winefield pleaded guilty, he and his lawyer, Peter McGrath of Concord, cloistered themselves in a conference room with Gunnison and several investigators.(1) No charges have been made public against anyone else in the scheme.

  • Gunnison declined to comment later Tuesday on the scope of the scheme, saying the FBI and U.S. Postal Inspectors are still working on the investigation, along with the joint state and federal Mortgage Fraud Task Force. “It’s an ongoing investigation. There is a strong likelihood that others will be charged,” Gunnison said.(2)

For the story, see Real estate agent admits to mail fraud.

For the criminal complaint, see U.S. v. Winefield (go here for the Plea Agreement).

(1) Since it's only been about three weeks since the criminal complaint was lodged against him, it doesn't take an excess of genius to surmise that Winefield has decided win the "race to the prosecutor's office", "bellying-up" to investigators and spill his guts in an attempt to take down as many of his co-conspirators and "buy-out" of as much prison time as possible. See United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) for one Federal judge's observation, made in the context of drug conspiracy cases, involving the so-called "race to the courthouse/prosecutor's office" which seems equally suited to other types of major, multi-defendant felony cases:

  • In practical terms, drug conspiracy cases have become a race to the courthouse. When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed.

(2) See Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals for other incidents that led to criminal prosecutions in sale leaseback deals.

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