John M. Claydon, Jr., 57, Trumbull, Connecticut, waived indictment and pleaded guilty to one count of bank fraud arising from his scheme to defraud a federally insured bank in connection with residential real estate loans.
According to documents filed with the Court and statements made in court, Claydon was a practicing attorney in Fairfield, Connecticut, who performed real estate closings. In pleading guilty, Claydon admitted that he was engaged by People’s Bank to act as a closing attorney in connection with the refinancing of mortgage loans on two properties owned by friends of his. At the time, Claydon was experiencing substantial financial problems relating to his law practice. In October 2004, when Claydon received checks from the bank as part of the refinancing transactions, he converted the money – more than $1.2 million – to his own use. Only after being confronted with his failure to use the proceeds as directed and repay the underlying loans did Claydon eventually pay the bank approximately $469,050. He has not repaid the balance
Wondering when will it stop? I had a client who had same problem in Boston area and could not refinance his property because his old loan was not paid off by closing attorney but instead attorney held funding money and made his monthly payments to original lender. What a mess….