Richard S. Hartunian, United States Attorney for the Northern District of New York, Rene Febles, Special Agent in Charge of the Office of Inspector General, U.S. Department of Housing & Urban Development (HUD) in New York, John F. Pikus, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation (FBI), and Lt. John D. Durling of the New York State Police Special Investigations Unit announced that Michael Cassadei of Schenectady, N.Y. has been sentenced by Senior United States District Judge Thomas J. McAvoy in Albany to 27 months in prison, to be followed by three years of supervised release, for his role as organizer of a local mortgage fraud scheme. Cassadei also was ordered to make full restitution, due immediately, in the total amount of $135,148.45.
Cassadei owned, operated and/or did business in the name of, or using a number of entities, including AAA Allstate Appraisal Services. He pled guilty on Feb. 17, 2010, at which time he admitted that, through the use of fraudulent loan applications, settlement statements, appraisals and other false statements and documents, he and the other participants in the scheme were able to fraudulently cause First Union National Bank of Delaware to finance the sale of Capital Region, N.Y.-area residential properties in amounts well in excess of their actual value, and that he and other participants then used the proceeds of the loans to purchase the properties in much lower amounts and retained the bulk of the funds. In furtherance of this scheme, Cassadei and the other participants coordinated two closings on the properties—in the first, the financial institution wired proceeds for the purchase of the properties for an amount substantially in excess of their true values. The mortgage amounts were inflated by, among other things, false seller-second mortgages and cash downpayments or other payments or credits for the end buyers that did not, in truth and fact, exist. After paying the costs and fees associated with the initial closing, Cassadei then caused the remaining proceeds to be transferred to him or others acting under his direction.
Thereafter, the deeds were recorded in reverse chronological order from that in which the sales actually occurred in order to create the appearance that the prior owners of the properties had conveyed them to the defendant and/or his nominees before sale to the end buyers, whereas the opposite was, in fact, what happened. As a result, the defendant was able to cause the bank, without its knowledge, to fund the purchase of the properties with the proceeds from their prior sale, with the bulk of the remaining funds going to the defendant or others at his direction.
United States Attorney Hartunian observed that "it is important that those who engage in mortgage fraud understand that they face significant penalties, and that such fraudulent schemes will be pursued aggressively in this District."
For more information, visit http://albany.fbi.gov.
