Connecticut Man Admits to Mortgage Fraud

David B. Fein, United States Attorney for the District of Connecticut, has announced that Steven J. Kottage of Weston, Conn. has pleaded guilty before United States District Judge Mark R. Kravitz in New Haven to two counts of conspiracy stemming from mortgage fraud schemes in which he participated. According to court documents and statements made in court, Kottage conspired with others to commit wire fraud by making materially false statements to H&R Block Home Mortgage Inc., including a false loan application, W-2, employment verification, and pay stub, in connection with a mortgage on a home on Fire Island, N.Y. In addition, Kottage admitted that he conspired with others to commit bank fraud by submitting a materially false loan application to Washington Mutual to refinance a condominium in Hillsboro Beach, Fla. A co-defendant, Mary Ellen Durso, served as the straw owner for the condo in order to obtain the fraudulent loan proceeds for the benefit of Kottage and another co-conspirator. Through both schemes, Kottage and others defrauded Wells Fargo and Freddie Mac of more than $600,000. Judge Kravitz has scheduled sentencing for July 11, 2011, at which time Kottage faces a maximum term of imprisonment of 30 years on each count. He also will be ordered to pay restitution in the amount of at least $616,547.93. On Dec. 14, 2010, Durso pleaded guilty to one count of conspiracy and five counts of filing false tax returns. On March 9, 2011, she was sentenced to three years of probation, the first six months of which she must serve in home confinement.