Mortgage Broker Sentenced to 210 Months

Allison Tussey —  June 9, 2010 — Leave a comment

Gregory Cooper was sentenced to 210 months in prison today for defrauding homeowners in Queens and the Bronx, New york, through a predatory mortgage scheme and for carrying out a separate scheme to defraud mortgage brokers around the country by selling them fraudulent lists of potential customers. A jury found Cooper guilty of nine counts of mail fraud and two counts of conspiracy to commit mail fraud in October 2009. Cooper was sentenced today in federal court in White Plains by United States District Judge Kenneth M. Karas.

According to the Superseding Indictment and the evidence at trial:

Beginning in approximately 2003, in the Bronx, New York, 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 truth and in fact, however, the lists were downloaded from an online service for 10 cents per name, and Cooper and his coconspirators had no reason to believe that any of the individuals on the lists had any interest in refinancing their mortgages.

Cooper and his co-conspirators 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 truth and in fact, however, 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, Cooperand 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. In some instances, the victims also had to face foreclosure and the loss of their homes.

Preet Bharara, the United States Attorney for the Southern District of New York, and Ronald J. Verrochio, the Inspector-in-Charge of the New York Office of the United States Postal Inspection Service (“USPIS”), announced the sentence. Mr. Bharara praised the United States Postal Inspection Service for its outstanding work in this case.

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

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Allison Tussey

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