Paralegal Admits Role in Mortgage Fraud Scheme

Allison Tussey —  August 3, 2010 — Leave a comment

Heather Bliss, 35, Norwalk, Connecticut, pleaded guilty before United States District Judge Janet C. Hall in Bridgeport to one count of conspiracy to commit wire fraud stemming from her participation in a mortgage fraud scheme.

According to court documents and statements made in court, Bliss was employed as a paralegal for a real estate lawyer in Wilton, Connecticut and, in that capacity, had responsibility for preparing and maintaining all legal and bank documents related to real estate transactions handled by her employer. Between approximately April 2006 and April 2007, Bliss, the lawyer for whom she was employed, a property developer and others conspired to defraud various lenders in a mortgage fraud scheme.

During the scheme, Bliss and her co-conspirators submitted false mortgage loan applications to financial institutions to obtain mortgages on various properties in Westport in order to develop and sell the properties for profit, and to pay off debts owed to “hard money” lenders from whom they had previously obtained high interest loans. The mortgage applications, which included false income information and omitted the mortgage applicants’ true indebtedness, caused the financial institutions to issue mortgage loans on properties that Bliss and her co-conspirators would not have otherwise been qualified to purchase, allowing the applicants to qualify for mortgages that far exceeded their ability to repay the loans.

Bliss overstated her income on the mortgages for which she had personally applied, and that she applied for new mortgages within 60 days of receiving prior mortgages knowing that the earlier mortgage would not be revealed when Bliss‘ credit report was run by the financial institution to which she applied.

Bliss‘ involvement in the scheme caused a loss to financial institutions of more than $1.24 million.

Judge Hall has scheduled sentencing for October 18, 2010, at which time Bliss faces a maximum term of imprisonment of five years and a fine of up to approximately $5 million.

David B. Fein, United States Attorney for the District of Connecticut, announced the guilty plea. 

This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Rahul Kale.

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. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including “foreclosure rescue” schemes, and “short sale” schemes. 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 ctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation Division; 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.

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Allison Tussey

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