Tuesday, November 1, 2011

Sale Leaseback Equity Stripping Peddler 'Scores' Guilty Verdict In Equity Stripping Ripoff; Grand Larceny, Scheme To Defraud, Conspiracy, Says Jury

In White Plains, New York, The Journal News reports:

  • The last defendant in a multimillion-dollar mortgage fraud case that officials say swindled four Westchester County families out of their homes was convicted of theft, fraud and conspiracy Tuesday.

  • A jury found Mildred Didio of Manhattan guilty of four felony counts of second-degree grand larceny and one each of first-degree scheme to defraud and fourth-degree conspiracy. She faces a maximum of 15 years in state prison when she is sentenced Jan. 25. She also could be sentenced to a minimum of five years' probation.

  • Prosecutors said she was involved with a group of eight who stripped homes from families in Croton-on-Hudson, Yorktown, Cortlandt and Mount Vernon; and scammed two mortgage lenders out of $1.4 million. All were arrested in 2009.

  • The group told victims, who they found through notices of public auction and foreclosure, that they could transfer their deeds to an investor, who would hold the titles while they saved money to reclaim their homes.

  • But once the "investor" took title, the group's members got inflated mortgages, which they used to pay off the original mortgage and kept the remainder for themselves. The former owners have filed lawsuits to try to reclaim their losses.

  • Didio, 46, represented the straw buyers or acted as a settlement agents for the lenders. Hubert "Phil" Hall, a former editor at a precursor to The Journal News, and his wife, Doreen Swenson, are serving two to six years in prison after pleading guilty to grand larceny and fraud. Prosecutors said the Tarrytown couple helped set up the phony mortgages.

  • David Reback, an attorney from Rye Brook, and Amerigo DiPietro of Brewster, who owned Interstate Monetary Concepts in Briarcliff Manor, pleaded guilty to their roles in the scam. Prosecutors said they were the principal players. They were sentenced to a year in jail. Eileen Potash of Queens was convicted at trial of fourth-degree conspiracy, a felony, but acquitted of second-degree grand larceny and first-degree scheme to defraud. She was sentenced to five years probation.

  • Frank Corigliano, a lawyer from Newtown, Conn., was acquitted of all charges by the jury that convicted Potash. Wilma Shkreli of Westwood, N.J., who posed as an investor, pleaded guilty to grand larceny. She is to be sentenced Nov. 22. This was Didio's second trial for her role in the scam. Her first ended in a hung jury.(1)

Source: Last of 8 defendants convicted in multimillion dollar mortgage scam.

For more on these sale leaseback foreclsoure rescue ripoffs, see:

(1) Apparently, the jury agreed with the prosecutor that all the sophisticated paperwork in the world (ie. business/purchase contracts, leases, closing statements, etc.) aren't enough to permit scammers to insulate themselves from criminal prosecution when targeting their victims simply by entering into legitimate-looking business contracts when screwing them over in an attempt to disguise a blatant criminal ripoff as a common, legitimate business deal.

This is not the first time that prosecutors (at least those with some guts) and courts have been asked to pierce through the acrobatics involved in creating the 'business-deal disguise' when the scammers argue that the arrangement was just a civil transaction that, if challenged, should be done with a civil lawsuit, not a criminal prosecution. See:

  • People v. Frankfort, (1952) 114 Cal.App.2d 680, 700; 251 P.2d 401:

    The simple answer to this argument is that "The People prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it. They are at liberty in such a prosecution to show the true nature of the transaction." (
    People v. Chait, 69 Cal.App.2d 503, 519 [159 P.2d 445]; People v. McEntyre, 32 Cal.App.2d Supp. 752, 760 [84 P.2d 560]; People v. Jones, 61 Cal.App.2d 608, 620 [143 P.2d 726]; People v. Pierce, supra, p. 605.)

  • People v. Jones, (1943) 61 Cal.App.2d 608, 620 [143 P.2d 726]:

    Defendant argues that the deal with each "seller" was a civil transaction; [...] Cloaked in the draperies of his corporation and pretending to act in its behalf, he boldly approached his unsuspecting victims.


    Although each deal in its incipiency bore the color and trappings of a normal, civil contract, yet when subjected to a postmortem it exhaled the stench and disclosed the carcass of a fraud. (People v. Epstein, 118 Cal.App. 7, 10 [4 P.2d 555].) There appears no sign of good faith at any turn. Each taking and appropriation was a grand theft.

    The use of the corporate name and the promises made in accomplishing his purpose were a camouflage of such common variety that no excess of genius was required to discern the fraud. Parol evidence of all that occurred was admissible to show the intention of defendant. (People v. Robinson, 107 Cal.App. 211, 221 [290 P. 470].)

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