Guilty plea entered in Pennsylvania mortgage fraud scheme

Guilty plea entered in Pennsylvania mortgage fraud scheme

August 17, 2010

Acting United States Attorney Robert S. Cessar has announced that Ralph Esposito, a resident of Beaver, Pa., has pleaded guilty in federal court to a charge of mail fraud and wire fraud conspiracy. Esposito pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, Assistant United States Attorney Brendan T. Conway advised the court that Esposito participated in a mortgage fraud scheme with several other individuals associated with Beaver Financial Services. As part of the conspiracy, Beaver Financial Services submitted loan applications on behalf of individuals and corporations that overstated the financial position of the borrowers, mainly related to the borrowers' income and assets. Individuals associated with the conspiracy also submitted fraudulent documents to the lenders that supported the fraudulent representations.
In addition, the mortgage fraud scheme included the submission to lenders of appraisals that overstated the true fair market values of the properties serving as collateral for the loans. The settlement statements associated with the loans were also fraudulent in that they reflected that the borrowers were making substantial down payments associated with the purchase of real estate and that liabilities associated with the collateral were being paid, when, in fact, the borrowers were often not making down payments and the liabilities associated with the collateral were often not being paid.
Esposito participated in the conspiracy mainly as a purchaser of real estate. The real estate was often purchased in the name of SPO Capitol, a corporate entity with which he was associated.
Judge Cercone scheduled sentencing for Dec. 10, 2010. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
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