Home Builder Pleads Guilty in Mortgage Fraud Scheme

Allison Tussey —  September 13, 2010 — Leave a comment

Guiseppe Cracchiolo, 60, Romeo, Michigan, pleaded guilty to a federal information that charges him with conspiracy to commit wire fraud.  Also charged in the one count information was Atiim Collins, 38, Detroit, Michigan, and Ted Carter, 59, Detroit, Michigan, both of whom have already pleaded guilty to the same information.

From 2002 through 2005, Collins, owner of Edgewood Property Management in Shelby Township, Michigan, recruited and paid individuals to act as straw buyers in fraudulent mortgage loan transactions. The scheme to defraud involved homes built by Cracchiolo, through his company, Mark Christian, Inc (MCI). The straw buyers generally had good credit ratings, but not enough income, and lacked the qualifications necessary to purchase the properties. Carter participated in the conspiracy by creating false documents, including fictitious W-2 forms and pay stubs, used by the straw buyers to support the fraudulently inflated asset and income information submitted on their mortgage loan applications. After the loans were approved by the lending companies, Cracchiolo used MCI to receive and disburse the illegally gained proceeds. This scheme to defraud resulted in the approval and disbursement of over $4.1 million in fraudulent mortgage loans.

Cracchiolo admitted that during the conspiracy, he arranged to have the illegally obtained loan proceeds transferred back to borrowers and others without the knowledge and approval of the lending companies. All of the properties involved in the fraud went into foreclosure resulting in approximately $2.5 million in losses to the lenders.

Conspiracy to commit wire fraud is punishable by a maximum sentence of 20 years’ imprisonment and $250,000 in fines.

United States Attorney Barbara L. McQuade made the announcement. McQuade was joined in the announcement by Maurice Aouate, Special Agent-In-Charge, Internal Revenue Service Criminal Investigation; Andrew Arena, Special Agent in Charge, Federal Bureau of Investigation, Detroit; Robert L. Davila, Special Agent in Charge U.S. Treasury Inspector General for Tax Administration; and Dean Tirro, Acting Special Agent in Charge United States Secret Service, Detroit.

Sentencing is scheduled as follows in front of United States District Court Judge Paul D. Borman: Carter on October 6, 2010 at 3:00 p.m., Collins on November 11, 2010 at 2:00 p.m., and Cracchiolo on December 2, 2010 at 3:00 p.m..

This case is being prosecuted by Assistant U.S. Attorney Karen Reynolds.

 

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Allison Tussey

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