Straw Buyer Sentenced for Mortgage Fraud

Allison Tussey —  March 11, 2011 — Leave a comment

Mary Ellen Durso, 54, Milford, Connecticut, was sentenced by U.S. District Court Judge Mark R. Kravitz in New Haven, Connecticut, to three years of probation, the first six months of which Durso must spend in home confinement, for her involvement in mortgage fraud scheme. On December 14, 2010, Durso pleaded guilty to one count of conspiracy stemming from the scheme, and five counts of filing false tax returns.

According to court documents and statements made in court, Durso conspired with others to commit bank fraud by filing a materially false loan application to Washington Mutual to refinance a condominium in Hillsboro Beach, Florida. Durso served as the straw owner for the condo in order to obtain the fraudulent proceeds for the benefit of her co-conspirators.

On September 20, 2007, after the refinance loan had been approved and funded, $233,874.98 was wired into Durso‘s bank account. The next day, Durso obtained two cashier’s checks totaling $155,544 for the benefit of her co-conspirators. Durso also gave her co-conspirators signed and unsigned blank checks to her bank account to allow them to write checks payable to themselves or to entities they controlled. As part of the scheme, one of her co-conspirators paid the mortgage by writing checks to Durso. The checks were deposited in Durso‘s bank account, and then mortgage payments were automatically withdrawn from the account, making it appear that the funds for the payment came from Durso.

By the summer of 2008, the mortgage payments had stopped, and the condo subsequently went into foreclosure. The home was then deeded to Federal Home Loan Mortgage Corp. (“Freddie Mac”) before being resold for approximately $35,000 less than the outstanding principal balance on the original refinance loan.

Durso also filed false tax returns for tax years 2004 to 2008 by inflating her itemized deductions, including her mortgage interest and medical expenses, resulting in a tax loss of approximately $46,000 to the government.

Judge Kravitz ordered Durso to pay restitution to Freddie Mac, and back taxes, plus penalties and interest, to the government.

David B. Fein, United States Attorney for the District of Connecticut, announced the sentencing.

This case is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney David T. Huang.

In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the task force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an e-mail to ctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General; and State of Connecticut Department of Banking.

To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.

 

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Allison Tussey

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