Former Mortgage Executive Pleads Guilty to Fraud Charges

Oct 06, 2017

General Electric has agreed to a $1.5 billion settlement to resolve federal claims involving the alleged misrepresentation of sub-prime loans originated by its former sub-prime mortgage subsidiary WMC Mortgage

A former Massachusetts mortgage company executive pleaded guilty to defrauding the federal government of more than $2.5 million.

Robert Pena, president of the now-closed Mortgage Security Inc. in Falmouth, Mass., admitted to six admitted to six counts of wire fraud and one count of conspiracy in federal court in Boston.

According to Acting U.S. Attorney William Weinreb, "Beginning in 2011, Pena began diverting money that borrowers were sending to Mortgage Security Inc. Pena also attempted to cover up his scheme by providing false reports to Ginnie Mae about the status of the loans MSI was servicing."

Pena used those funds for personal and business expenses, and also diverted borrowers’ escrow funds and mortgage-insurance premiums for his own use. Pena, 68, will be sentenced on Jan. 5 and faces up to 20 years in prison.

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Phil Hall

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Oct 06, 2017

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