Mortgage Broker Convicted of Defrauding Homeowners

admin —  October 30, 2009 — 4 Comments

Gregory Cooper, 42, New York, has been convincted by a jury in White Plains federal court of defrauding homeowners in Queens and the Bronx, New York through a predatory mortgage scheme. The jury also convicted Cooper of carrying out a separate scheme in which he and his co-conspirators defrauded mortgage brokers around the country by selling them lists of purported “live leads” – homeowners who had supposedly expressed an interest in speaking with a local mortgage broker about refinancing their mortgages – which were, in fact, lists of individuals who had never expressed any such interest. The jury’s verdict followed a two-week trial before United States District Judge Kenneth M. Karas in White Plains, New York.

According to the Superseding Indictment and the evidence at trial:

Beginning in approximately 2003, in the Bronx, Cooper and several co-conspirators set up a business that telephoned mortgage brokers around the country, offering them lists of purported “live leads” – homeowners in the brokers’ local area who had purportedly expressed an interest in speaking with a local mortgage broker about refinancing their mortgages. Cooper charged the mortgage brokers approximately $20 per name – approximately $3,000 per list – claiming that the leads were collected through a massive telemarketing and survey effort. In fact, the lists were downloaded from an online service for 10 cents per name, and Cooper and his co-conspirators had no reason to believe that any of the individuals on the lists had any interest in refinancing their mortgages. Cooper and his coconspirators collected more than $700,000 selling these bogus “leads.”

In 2006, Cooper moved his business to Central Valley, New York, where he and his co-conspirators operated from the basement of Cooper‘s house. During this period, Cooper and his co-conspirators turned their attention from defrauding mortgage brokers to defrauding New York City homeowners. Specifically, Cooper and his co-conspirators cold-called homeowners in working class neighborhoods in Queens and the Bronx, offering them the opportunity to refinance their mortgages at a fixed interest rate of approximately two percent for the first five years, and approximately five percent for the final 25 years. Cooper prepared and supplied the homeowners with documents appearing to substantiate these rates.

In fact, the exclusive type of mortgage that Cooper sold was a negative amortization mortgage with a fixed interest rate of one percent for the first 30 days, which adjusted every month thereafter, generally to rates between eight and nine percent. Employing various false statements and other deceptions, Cooper and his co-conspirators managed to get their clients to execute these mortgages without the clients ever understanding that the true terms were not remotely those that had been promised. Only upon receiving their initial mortgage statements did the victims recognize that they had been swindled.

From 2006 through 2008, Cooper and his co-conspirators brought in more than $750,000 in brokerage commissions from several dozen fraudulently induced mortgages, collecting between approximately $15,000 and $20,000 per mortgage. The victims, unable to carry the mortgages that Cooper had tricked them into executing, had to pay thousands of dollars each to refinance and, in some instances, had to face foreclosure and the loss of their homes.

The jury convicted Cooper of nine counts of mail fraud and two counts of conspiracy to commit mail fraud. Following the verdict, Judge Karas revoked Cooper‘s bail and remanded him to jail. Cooper faces a maximum potential sentence of 220 years in prison, as well as a maximum fine of the greater of $250,000 or twice the gross pecuniary gain or loss from the offense on each count.

Cooper, 42, is scheduled to be sentenced by Judge KARAS on February 23, 2010.

Mr. Preet Bharara, the United States Attorney for the Southern District of New York said: “In these tough economic times, we will not allow common criminals to prey upon hard-working people trying to achieve the American dream of home ownership. As we did today, we will continue to bring to justice unscrupulous fraudsters who saddle honest men and women with unaffordable mortgages and fears of foreclosure.” Mr. Bharara also praised the investigative work of the United States Postal Inspection Service, Ronald J. Verrochio, the Inspector-in-Charge of the New York Office and the Town of Woodbury, New York Police Department.

Assistant United States Attorneys Kathryn M. Martin and Michael A. Levy are in charge of the prosecution.

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4 responses to Mortgage Broker Convicted of Defrauding Homeowners

  1. I bought property (what I thought was a a condo) in 2008 from the developer/real estate broker seller. She never updated the building (100 y/o apt. building). The paperwork she took from 2 different condo bldgs, a Master Deed and a Declaration of Trust, void eachother out. I am an owner of a unit and the trustee of that unit, as are the other owners, so there can be no condo association. After I started questioning her about updates to outside of building not being done, as is written in legally filed paperwork, she claimed the paperwork is a typo. Her lawyer never provided me or any of my representatives with proper filed stamped paperwork until a year after I bought (she threatened to sue me for my down pymnt if I did not purchase property when I became apprehensive about things). Her lawyer represented her, the condo asso., and the bank I received my mortgage from. I reported him to the proper state board of attornies (he got a slap on the wrist, but at least if he tries something he will lose his license to practice law). The developer put the water bill in my name, but I share a water meter with my neighbor, who has the meter in his home. Part of my purchasing stipulations were that I had my own private water meter. The town water dept refused to turn off water b/c 2 homes use it and if my neighbor decides not to give me $ for the bill, I am on the hook for the whole thing.
    My mortgage broker, who was the silent partner of the developer, had her unqualified. unlicensed. uninsured brother “work” in my unit (before I bought), but also had him do exterior work and damaged not only the outside property of the building I am in, but the surrounding 4 properties, causing at least $80,000 worth of damage. The mortgage broker owned my unit then sold it back to developers who sold to me. She still had deed to my unit and took out $100,000 HELOC on my unit 3 months after I purchased. It took a year and the Feds to remove it. The bank took complete responsibility and she got away with it, (not before trying to burn down bldg for ins money, but thank god one of the tenants in her neighboring units called Fire Dept and only smoke damage to her unit was caused).
    I have reported the developer to the licensing board, and after 2 years, they are still investigating her (or so they tell me). So very frustrating that she pretty much got away with 4 counts of fraud (myself and other 3 owners). She doesn’t believe she did anything wrong and that she is not responsible for any of it. She blamed her silent partner, lawyer, me, my representatives, the town where the property is, but worst of all, her husband.

  2. Wow, I was a nanny for this guy and his family taking care of his son. Its crazy to read all of this and find out about it. He always has been a huge criminal, and because of his actions I am sure his wife and sons lost their house. Shame. I hope he never gets out.

  3. I am trying to understand something….. the borrowers went to a closing. There they were presented documents from the bank. The bank attorney explained everything to them. They had three days to review the documents. Unless Cooper falsified the closing documents what is he really guilty of – false advertising?? How different is he than the thousands of mortgage companies that advertise a low fixed rate, but never really close your loan at that rate?

    Why isn’t the banks attorney charged?

    I can tell you what happenned. Someone complained to the AG about his fake lead buisness and once the AG opened up a can of worms, there was no turning back.

    This guy Cooper is def a slimeball, but there are an awful lot of borrowers who didn’t read a thing, a bank attorney who didn’t do his job and most probably a title closer/company that was party to it as well.

  4. it is a good text.

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