Manhattan DA Bags 25 Suspects In $100M+ "Cash Back" Metro NYC Mortgage Scam; 13 Charged w/ Multiple Felonies, Dozen Others Waive Indictment, Cop Pleas

From the Office of the Manhattan District Attorney:

• Manhattan District Attorney Robert M. Morgenthau announced [Wednesday] the indictment of 13 individuals and a mortgage origination company(1) for perpetrating over $100 million in mortgage fraud over a four-year period in the New York City metropolitan area. In addition, 12 individuals have already waived indictment and pleaded guilty to felonies relating to their participation in the mortgage fraud scheme.(2)

• The indictment charges 13 individuals and the mortgage company, AFG FINANCIAL GROUP, INC., with enterprise corruption, grand larceny, scheme to defraud and conspiracy involving 19 fraudulent mortgage transactions. The defendants include the principals and a number of employees of the mortgage company, as well as bank employees, appraisers, and three attorneys. Two other attorneys are among the defendants who already pleaded guilty.

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• The 10-month investigation leading to today’s indictment revealed that AFG Financial Group (AFG), along with a network of co-conspirators and accomplices, located distressed residential real estate properties in New York City and surrounding counties. They then engaged in a fraudulent scheme to steal millions of dollars from lending banks in Manhattan and elsewhere using sham sales of those properties. The conspirators caused the banks to front millions of dollars to finance purchases of the properties. They then walked away with most of the cash, leaving behind over-valued properties and worthless mortgage papers.

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• At the sham real estate closings, AFG brought in lawyers to play the roles of legal counsel for buyers, sellers and banks. Instead of looking after their clients’ interests, these lawyers made sure that the closings went smoothly, that no one asked any questions, and that the principals of AFG received the lion’s share of the funds obtained from the defrauded banks. Defendants MARC ZIROGIANNIS and FRED LAX generally represented the banks. In so doing, they betrayed their clients and caused their client’s funds to be stolen. ZIROGIANNIS and LAX also ran title companies that were employed as part of the scheme.

Go here for the entire Manhattan DA press release.

For the indictment, see People v. AFG Financial Group, Inc., et al.

(1) Indicted Defendants:

• AFG FINANCIAL GROUP, INC., AARON HAND, Oyster Bay Cove, New York, EUGENE CULBREATH, Valley Stream, New York, ERIC SHIELDS, Media, Pennsylvania, MATTHEW MCDERMOTT, Merrick, New York, MARC ZIROGIANNIS, Levittown, New York, KENNETH LAW, Pelham, New York, KATHLEEN SCANLON, Baldwin, New York, JEFFREY PHELAN, Smithtown, New York, JERRY STRKLJA, Astoria, New York, MARILYN MATEO, Bronx, New York, DARLITA BOSTIC, ALLYSON HINDS, Middle Island, New York, RAJMOHAN AUTAR, Queens Village, New York.

(2) Convicted Defendants:

• MARIA ALBERTINA, EDMOND BEROOKHIM, CHRISTOPHER CARR, PATRICK KUHL, FRED LAX, STEPHEN MARTINI, FRANK MIALE, GIOVANNI MUNIVE, JENNIFER SCHIFF, WAYNE SISMAN, SHARON THOMPSON, SALVATORE TRAPANI.