Charles R. Sammon, 37, West Pittston, Pennsylvania, formerly an attorney practicing in Boston, Massachusetts, was convicted of mortgage fraud.
The defendant pleaded guilty before U.S. District Judge Richard G. Stearns to 13 counts of wire fraud, mail fraud and money laundering, all in connection with the mortgage fraud scheme that occurred in 2006 and 2007.
Sammon participated in at least 13 fraudulent real estate transactions involving triple-decker apartment buildings in various sections of Boston, including Dorchester, Roxbury and Jamaica Plain. For eight of those transactions, Sammon served as the real estate closing attorney representing the mortgage lender. For the other five, Sammon participated as the seller of real property himself.
The basic scheme involved recruiting people to buy properties by promising to pay them as much as $40,000 per transaction, which payments were not disclosed to the lenders. Many of the buyers were also promised that the seller would pay the mortgage for upwards of a year. Also central to the scheme was representing to the lenders that each borrower intended to occupy the property as his or her primary residence, when that was not the case, as Sammon knew.
Many of the payments to buyers were made directly from Sammon’s law firm bank account on transactions for which he was the closing attorney, but Sammon failed to disclose those payments to the mortgage lenders that he represented. Sammon also received some of the loan proceeds in addition to his legal fees, which was not disclosed to the lender. In one transaction, he received more than $50,000.
Each of the loans for these 13 transactions went into default, and all the properties were sold at foreclosure or through a short sale, resulting in combined losses to the lenders of more than $2.5 million.
Sentencing is scheduled for Feb. 19, 2014. Sammon faces a maximum sentence of 20 years in prison, to be followed by three years of supervised release and a $250,000 fine on each of the mail and wire fraud charges, and 10 years in prison, three years of supervised release and a $250,000 fine on the money laundering charge.
United States Attorney Carmen M. Ortiz; John Collins, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Kevin Niland, Inspector in Charge of the United States Postal Inspection Service; Steven Ricciardi, Special Agent in Charge of the United States Secret Service; and Fred W. Gibson, Jr., Acting Inspector General of the Federal Deposit Insurance Corporation, made the announcement.
The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit and DOJ Trial Attorney Alexander H. Berlin.