Pennsylvania Man Admits Mortgage Fraud Scheme

Allison Tussey —  August 5, 2009 — Leave a comment

Robert Ratkovich, 40, New Castle, Pennsylvania, pleaded guilty on July 28, 2009, in federal court to charges of Bank and Mail Fraud Conspiracy and Money Laundering Conspiracy. Ratkovich was charged in a 2 count information with conspiracy and money laundering on July 14, 2009.

Ratkovich pleaded guilty to two counts before Senior United States District Judge Gustave Diamond. In connection with the guilty plea, Assistant United States Attorney Brendan T. Conway advised the court that Ratkovich participated in a conspiracy to defraud First Commonwealth Bank and Affordable Housing of Lawrence County. The Board of Directors of Affordable Housing of Lawrence County hired Ratkovich as a consultant to advise the Board of which properties that Affordable Housing of Lawrence County should purchase and at what price.

Rather than do a diligent search, however, Ratkovich simply advised the Board to purchase seven properties that were all owned or otherwise associated with an individual known to the United States Attorney. In addition, the prices had not been negotiated, but the sales prices had been set by Ratkovich‘s co-conspirator, who was receiving kickbacks from some of the sellers who were having their properties sold to Affordable Housing of Lawrence County. As Affordable Housing of Lawrence County had insufficient funds to purchase the properties, it received a loan from First Commonwealth Bank to finance the purchase. Ratkovich and others made misrepresentations to First Commonwealth Bank regarding the financial status of Affordable Housing of Lawrence County, and another co-conspirator submitted fraudulent appraisals of the properties to First Commonwealth Bank that vastly overstated the true fair market values of the properties. In addition, Ratkovich participated in a conspiracy to launder the proceeds of the fraud by causing the deposit of some of the proceeds of the fraud into an account of a business that regularly received cash payments to conceal the source of the funds. Some of the proceeds of the fraud were then withdrawn and provided to another entity for the benefit of the co-conspirators.

Judge Diamond scheduled sentencing for October 28, 2009. The law provides for a total sentence of fifty years in prison, a fine of $1,500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.

United States Attorney Mary Beth Buchanan announced the guilty plea.

The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Ratkovich. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff’s Office; the Pennsylvania Attorney General’s Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee’s Office.

Mortgage industry members with knowledge of fraudulent activity are encouraged to call the Mortgage Fraud Task Force at (412) 894-7550. Consumers are encouraged to report suspected mortgage fraud by calling the Pennsylvania Attorney General’s Consumer Protection Hotline at (800) 441-2555.

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Allison Tussey

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