Norwalker Anna McElaney, 40, was sentenced to eight months imprisonment for her involvement in a short sale mortgage fraud scheme, according to a statement from David B. Fein, U.S. attorney for Connecticut. McElaney's sentence, handed down by U.S. District Judge Janet C. Hall on Monday in Bridgeport, includes three years of supervised release after her imprisonment. The first six months of that must be spent in home confinement.
A short sale transaction involves a mortgage holder or lender entering into an agreement to release its mortgage or lien on property in exchange for payment of less than the total amount owed on the underlying debt. Many short sale transactions are legitimate.
According to court documents and statements made in court, real estate agents McElaney and Sergio Natera defrauded Regions Bank, which held two mortgages on a residential property in Bridgeport. McElaney, who was listing agent for the property, received an offer to purchase the property for $132,500 on Dec. 5, 2007. However, McElaney and Natera informed Regions Bank that the highest offer for the property was for $102,375 from BOS Asset Management LLC.
McElaney and Natera concealed from Regions Bank that another bidder made a higher offer, that Natera owned BOS Asset Management and that McElaney and Natera planned to keep the difference between the two prices. Based on the false and incomplete information provided, Regions Bank agreed to the sale for the lower price and released its mortgages on the property.
McElaney and Natera arranged for two sales of the property to occur June 9, 2008. The first sale was from the owner to BOS Asset Management for $102,375; the second sale was from BOS Asset Management to the original bidder on the property for $132,500. McElaney and Natera kept the difference between the two sale prices.
"This prosecution should serve as a warning to real estate agents and others who seek to take advantage of the current financial crisis by defrauding lenders through short sale fraud schemes," said Fein.
McElaney pleaded guilty to one count of bank fraud Feb.19, 2010. Natera pleaded guilty to the same charge Feb. 11, 2010. He awaits sentencing.
The FBI investigated. Assistant U.S. Attorney Ann M. Nevins prosecuted the case. In July 2009, the U.S. attorney's office and the FBI announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes. 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 email@example.com .
To report financial fraud crimes, and to learn more about the President's Financial Fraud Enforcement Task Force, visit its website.
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