Aaron Dare, 39, Albany, New York was sentenced for wire fraud, mortgage fraud, and causing false statements to be made on HUD-Insured Loans. The Honorable Lawrence E. Kahn, U.S. District Judge, sentenced Dare to a total concurrent sentence of imprisonment for 63 months on three counts, recommened him to pay $1,952,200.00 restitution to victims, and to begin serving his sentence immediately.

Dare’s convictions stem from his guilty plea on November 13, 2006, during which he admitted in substance as follows: From in or about late 2000 through in or about August 2002, Dare participated in a scheme and artifice to defraud and to obtain money and property by means of false and fraudulent pretenses, representations and promises in connection with his acquisition of the Hinckel Brewery Apartments, a multi-family residential housing project located at 201 Park Avenue, Albany, New York, the Olde Franklin School Apartments, a multi-family residential housing project located at 1675 Avenue B, Schenectady, New York, and the Historic Pastures Village Apartments, a multi-family residential housing project consisting of approximately 39 residential buildings located in the Historic Pastures area of Albany. As part of this scheme, Dare provided false information to the private mortgage lender, AMI Capital, Inc., Bethesda, Maryland, and the U.S. Department of Housing and Urban Development, which insured the loans, regarding his experience and qualifications, and the identity, experience and qualifications of his purported investors. Promissory notes in the amounts of $1.8

million and $700,000 were prepared and executed between Dare’s company, Emerge Real Properties, LLC, and entities affiliated with the seller, which falsely made it appear to AMI and HUD that Dare and/or Emerge had approximately $2.5 million in equity and credit to apply toward the purchase of the properties when, in truth in fact, the promissory notes were false and fraudulent and the defendant and his companies did not have such equity and credit to apply toward the purchase of the properties.

As part of the scheme, an additional promissory note was prepared and executed, which was not provided to AMI or HUD, and which effectively cancelled out the purported equity reflected in the false and fraudulent $1.8 million promissory note. As a further part of the scheme, the stated purchase price of the properties was inflated from approximately $6 million to approximately $8.5 million to take into account the bogus promissory notes. Also, notwithstanding the existence of a significant financial relationship between Dare and the owner of the properties, Identity of Interest Disclosure Statements were prepared and executed that, in substance, represented to AMI and HUD that there was no identity of interest between the entities that were identified as the borrower and the seller of the properties.

After reviewing extensive documentation provided by Dare and others, and in reliance on the false statements and documents admitted by Dare as part of his plea today, AMI made HUDinsured loans in the total amount of $7,577,400 to Dare’s company for the purchase of the three residential housing projects, with a total stated purchase price of approximately $8.5 million. In execution of this scheme, on or about August 29, 2002, Dare knowingly caused to be transmitted in interstate commerce from AMI’s warehouse vendor in the State of Ohio to the State of New York, a wire transfer of funds in the amount of $3,678,866.42 for the purchase of the Historic Pastures Village Apartments. Shortly after the closing on the third loan in August 2002, all three loans went into delinquent status and, eventually, defaulted. Pursuant to the terms of the loan agreements, HUD foreclosed on the properties and, following the sale thereof, suffered a total loss of approximately $1,952,200.

In support of his guilty plea to the separate conspiracy charge contained Count Three of the Information, Dare admitted in substance as follows: From in or about December 2003 through in or about December 2005, he conspired and agreed with another person to use interstate wire communications in execution of a scheme and artifice to defraud and to obtain money and property from mortgage lenders by means of false and fraudulent pretenses, representations and promises.

As part of this scheme, Dare’s conspirator would and did locate borrowers to obtain mortgages for the purchase of various residential properties in and about the City of Albany, New York. Thereafter, Dare would and did prepare loan applications for the borrowers, which applications sometimes falsely represented that the borrowers had access to capital, usually through a bank account. In these applications, Dare also would and did falsely state and inflate the income of borrowers who he did not believe would otherwise qualify for financing. As part of this scheme, Dare’s conspirator would and did obtain cashier’s checks in the names of borrowers as purported proof of their access to capital when, in truth and fact, this was not the borrowers’ capital and the checks were retained after the closings by Dare’s conspirator. Dare and his conspirator would utilize inflated property values in obtaining financing, in order that the borrowers could obtain the properties without putting money down, and Dare and his conspirator could profit from the additional proceeds from the fraudulently obtained mortgages.

In furtherance of the scheme set forth in Count Three, Dare submitted or caused to be submitted approximately thirty-one (31) Uniform Residential Loan Applications containing false information regarding the income and/or assets of the borrowers, by facsimile and/or electronic mail from within the State and Northern District of New York to lenders in other states, including approximately seventeen (17) fraudulent applications submitted to BNC Mortgage and approximately seven (7) fraudulent applications submitted to Freemont Investment and Loan, both located the State of California. During the same period, Dare’s conspirator obtained and retained cashier’s checks in the names of the borrowers as purported proof of their access to capital, in furtherance of the scheme as set forth above.

The case was investigated by the Albany Division of the Federal Bureau of Investigation and the Office of Inspector General, U.S. Department of Housing and Urban Development, with the assistance of the Criminal Investigation Division of the Internal Revenue Service, U.S. Department.of Treasury.