Convicted NY Attorney Gets License Yanked For Role In Sale Leaseback, Equity Stripping Ripoff

In New York City, Reuters reports:

• A New York attorney convicted in connection with a mortgage-fraud scheme that bilked $1.4 million from four families and two mortgage lenders was ordered disbarred this week by an appellate court.



• Eileen Potash, 54, was found guilty by a Westchester County jury in November 2010 of conspiracy in the fourth degree. In an order published Thursday, the Appellate Division, Second Department, relied on that conviction to ban Potash from practicing law in New York.



• Potash, who faced up to 3 years in prison, was ultimately sentenced to 5 years' probation and 180 days of community service, according to the Westchester County District Attorney's office. She was one of eight individuals charged following a nine-month mortgage-fraud investigation by the Westchester County DA and the New York State Banking Department's Criminal Investigations Bureau.



• Five of the defendants pleaded guilty, while three, including Potash, went to trial, according to the DA's office. One of the other two defendants was acquitted, prosecutors said, and the third defendant's trial ended in a mistrial.



• According to prosecutors, Potash and her co-defendants -- including lawyers, mortgage brokers and a husband-and-wife team posing as foreclosure-rescue specialists -- preyed on desperate property owners, convincing them to deed their homes to "investors" who would sell the homes back to them in one to two years.



• Instead, the defendants used the homes to obtain inflated mortgage loans from two lenders, Fremont Investment and Loan and Argent Mortgage Company, by misleading the lenders about the homes' actual purchase prices, prosecutors said.



• Potash, who did not oppose or respond to the appeals court proceeding, could not immediately be reached for comment on Friday.

Source: Appeals court disbars lawyer in $1.4 mln mortgage-fraud scheme.

For the court ruling, see Matter of Potash, 2011 NY Slip Op 08759 (App. Div. 2nd Dept. November 29, 2011) (per curiam).