Man Sentenced for Mortgage Fraud and Money Laundering Offenses

Allison Tussey —  December 9, 2013 — Leave a comment

Henry J. Papale, 62, Southington, Connecticut, was sentenced by Senior U.S. District Judge Ellen Bree Burns in New Haven to 30 months of imprisonment, followed by three years of supervised release, for operating a mortgage fraud scheme.

According to court documents and statements made in court, in 2007, Papale convinced others to purchase four investment homes in Florida using mortgage loans. To inflate the size of the mortgages above the purchase prices for the properties, Papale submitted fraudulent invoices, work authorizations, and wire transfer instructions to a settlement agent in Florida, each purportedly from a construction company for restoration on the properties. In fact, the construction company was fictitious, and no work was performed on the properties.

Following the closing on each sale, the Florida settlement agent wired loan proceeds, in amounts that corresponded to the cost of the restoration work, to a bank account in Southington that it believed belonged to the fictitious construction company but was actually held by certain of Papale’s family members.

A total of $360,307.23 was transferred to Papale’s family members in this manner. Based on Papale’s representations, a member of Papale’s family then turned the majority of the fraudulently obtained loan proceeds over to Papale, who deposited them into his own bank account. Papale ultimately transferred $255,500 in fraudulently obtained loan funds from that bank account to an investment trading account he held.

On August 13, 2013, Papale pleaded guilty to one count of wire fraud and one count of money laundering.

Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced the sentence.

This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorneys Jonathan N. Francis and Michael S. McGarry.

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Allison Tussey

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