Tuesday, January 17, 2017

Bay State Attorney Gets No Prison Time After Admitting To Forging 17 Mortgage Assignments On Soon-To-Be Sold Homes, Then Providing Closing Agents With Forged Statements In Effort To Pocket Loan Payoff Proceeds; Gets 10 Years Probation, Agrees To Surrender Law License

In Marblehead, Massachusetts, The Salem News reports:
  • A Marblehead lawyer has pleaded guilty to orchestrating a $1.3 million mortgage fraud scheme in 2009 and has agreed to give up his law license.

    Leon Gelfgatt, 56, [...], was charged after investigators were tipped off by a bank that Gelfgatt was filing forged mortgage assignments in several counties so the proceeds of upcoming sales would be transferred to him, rather than the rightful owners or mortgage holders.

    On Oct. 20, seven years after the scheme was first uncovered, Gelfgatt was sentenced to 10 years of probation and agreed to surrender his law license, as well as perform 250 hours of community service, during a hearing in Suffolk Superior Court, court documents show.

    Gelfgatt pleaded guilty to 16 counts of forgery, 18 counts of passing forged documents, and three counts of attempting to commit a crime.

    The state’s Board of Bar Overseers ordered his suspension on Dec. 12.

    Investigators were contacted in November 2009, by officials at Wainright Bank and Trust, who had discovered that over the course of four months, Gelfgatt spotted and targeted 14 high-value properties for sale in eastern Massachusetts, mostly in Suffolk, Norfolk and Middlesex counties. He was also charged with one count in Essex County. The cases were consolidated in Suffolk Superior Court.

    Gelfgatt forged and filed 17 bogus mortgage assignments at local deed registries, documents that appeared to transfer existing mortgages on those properties to one of two inactive corporations he’d found being sold on the internet, prosecutors said after his arrest.

    Gelfgatt used computers to create a series of email addresses, phone numbers and fax numbers to make it appear that these two firms were actually still in business.

    Then, he would wait for the lawyers involved in the closing to contact the businesses to get the payoff amount. Gelfgatt would then forge payoff statements directing the closing attorney to send the payoff amount by overnight mail to an office address he had set up in Boston.

    He was arrested when he showed up and tried to collect the funds.

    In November 2011, prosecutors filed a motion seeking to compel Gelfgatt to enter his password to unlock the encryption software he installed on his computers, which investigators had seized during a warrant.

    That request led to a 2 1/2 year delay in the case while that issue was presented to the Supreme Judicial Court. Gelfgatt refused to provide the password, saying it was a violation of his Fifth Amendment right against self-incrimination to require him to do so.

    The SJC finally ruled in 2014 that the government could compel Gelfgatt to disclose the password, which he eventually did, following a series of contempt proceedings in Suffolk Superior Court, the court docket shows.

    After a motion to suppress evidence against him was denied, a series of lobby conferences, sessions usually held in a judge’s chambers to discuss a possible resolution of the case, was held throughout 2015 and 2016.

    A plea agreement was finally reached in October.

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