Genaro R. Hathaway, 47, Weston, Connecticut, was sentenced by United States District Judge Mark R. Kravitz in New Haven to 33 months of imprisonment, followed by three years of supervised release, for participating in two mortgage fraud conspiracies.
As previously reported by Mortgage Fraud Blog, Hathaway, an attorney, conspired with his husband, Steven Kottage, to commit wire fraud by making materially false statements to H&R Block Home Mortgage, Inc., including a false loan application, W-2, employment verification, and pay stub in connection with a mortgage on a home on Fire Island, New York.
In addition, Hathaway and Kottage conspired to commit bank fraud by submitting a materially false loan application to Washington Mutual to refinance a condominium in Hillsboro Beach, Florida. A co-defendant, Mary Ellen Durso, served as the straw owner for the condo in order to obtain the fraudulent loan proceeds for the benefit of Hathaway and Kottage. Through both schemes, Hathaway and Kottage defrauded Wells Fargo and Freddie Mac of more than $600,000.
The investigation of this matter revealed that Hathaway and Kottage fraudulently appropriated nearly $750,000 in Hathaway‘s clients’ funds while Hathaway was serving as the clients’ closing attorney for real estate transactions. When confronted by those clients, Hathaway and Kottage devised the mortgage fraud schemes to repay the stolen money.
On April 29, 2011, Hathaway pleaded guilty to two counts of conspiracy and one count of tax evasion.
On April 21, 2011, Kottage pleaded guilty to two counts of conspiracy stemming from these schemes. On November 16, 2011, he was sentenced to 41 months of imprisonment.
On December 14, 2010, Durso pleaded guilty to one count of conspiracy and five counts of filing false tax returns. On March 9, 2011, she was sentenced to three years of probation, the first six months of which she must serve in home confinement.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service ““ Criminal Investigation. The case was prosecuted by Assistant United States Attorney David Huang, Senior Litigation Counsel Richard Schechter and Special Assistant United States Attorney Jonathan Francis.
David B. Fein, United States Attorney for the District of Connecticut, announced the sentence.
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. 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 email to email@example.com.
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.