Pennsylvania Attorney First To Cop Plea In Alleged Sale Leaseback, Equity Stripping Ripoff Targeting Homeowners Seeking Foreclosure Rescue

In Philadelphia, Pennsylvania, the Philadelphia Daily News reports:

• A Doylestown lawyer admitted his guilt [] in federal court in connection with a $14.6 million mortgage-fraud scheme that victimized 35 homeowners from fall 2004 to June 2007. Stephen G. Doherty, 43, pleaded guilty to 15 counts of conspiracy, wire fraud and related bankruptcy and money-laundering offenses. U.S. District Judge Mary McLaughlin set sentencing for May 24.(1)

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• In fall 2004, Doherty mailed advertisements to distressed homeowners and referred respondents to co-defendant Edward McCusker, who owned a mortgage company. McCusker, who has pleaded not guilty in the case, allegedly told homeowners he could save their homes by getting a mortgage in someone else's name for a year, while they leased the house back at a rent they could afford.

• Instead, court papers said McCusker, of New Hope, arranged for the homeowner's residence to be transferred to a straw purchaser, used fake documents to obtain a mortgage in the name of the straw purchaser and took proceeds of sales for himself and co-defendants.

For more, see Lawyer admits mortgage scam.

For the indictment, see U.S. v. McCusker, et al.

For an earlier post on the related indictment in this case, see Philly Feds: Two Lawyers Among Five Who Ran Bogus Sale Leaseback, Equity Stripping Racket Clipping 35 Homeowners Of $14.6M; Civil Suit Pending.

(1) According to the story, the government alleged that Doherty and four others targeted homeowners facing foreclosure, promised to help them save their homes, engaged in real-estate transactions with straw purchasers and obtained dozens of bogus mortgages. Reportedly, authorities said most of the victims did not ultimately lose their homes in the scheme. Doherty, a bankruptcy lawyer, admitted involvement with four mortgage scams involving homeowners in Chalfont, Quakertown, Perkasie and Lumberville. The Perkasie and Lumberville homeowners were clients of Doherty, the story states.

Mortgage company owner Edward McCusker and his wife, Jacqueline, of New Hope, Doherty's law partner Jeffrey Bennett, of Springfield, and John Bariana, of Mullica Hill, N.J. have pleaded not guilty. The criminal probe in this case may have been triggered by an earlier-filed civil lawsuit brought by some of the victims of this alleged scam against Doherty and others. See The Intelligencer: Suit claims 9 are victims of mortgage scheme. foreclosure rescue