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Ex-county lawmaker, 16 others charged in $82M mortgage fraud
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A former Suffolk County legislator is among four defendants arraigned today on grand larceny, forgery, conspiracy and fraud charges in a 130-count indictment alleging approximately $82 million in mortgage fraud involving 60 houses, most in the Town of Southampton.
Suffolk District Attorney Thomas Spota said former Legislator George Guldi and others named in the indictment participated in the schemes defrauding banks and mortgage companies through the use of straw purchasers filing false loan applications and "mortgage stacking" that relied on the creation and use of bogus title reports to conceal outstanding mortgages, thereby duping lenders into believing the homes were unencumbered by existing liens.
"These defendants, including attorneys, title closers and straw purchasers, filed mortgage applications that were filled with fraud — fake employer information, phantom bank balances forged notary signatures and falsified powers of attorney — persuading lenders, including JP Morgan Chase, Washington Mutual and Bank of America, into loaning tens of millions of dollars in mortgages that, as we stand here today, are all in default," District Attorney Tom Spota said.
Guldi pleaded not guilty and posted $500,000 bond.
Among others charged are attorney Brandon Lisi, 35, of Dix Hills; Dustin Dente, 37, and title closer Melissa Lanzilotta-Smith, 33, of Babylon, who face first-degree grand larceny charges for fraudulently obtaining two mortgages in 2008 for a restaurant property at 53-55 Main Street in Cold Spring Harbor. Those three defendants and alleged straw buyer Nadeem Noor-Mohammed, 46, of Northport, are charged in the indictment with second-degree grand larceny for the theft of more than $50,000 in obtaining a fraudulent mortgage from JP Morgan Chase in May 2007 for a Stuyvesant Street, Huntington property.
The DA alleges that Ethan E. Ellner, of Plainview, an attorney and operator of Suburban Abstract title company in Stony Brook, defrauded lending institutions of millions of dollars by using forged documents, false employment and income information on applications, false powers of attorney, and other fraud. Ellner, 49, pleaded not guilty at his arraignment Aug. 5 to 21 counts of first degree grand larceny, 11 counts of second degree grand larceny, as well as charges of conspiracy, offering a false instrument for filing and money laundering.
Spota said the alleged frauds employed the use of straw purchasers, who received a fee of between $5,000 and $10,000 to victimize lenders by filing false loan applications that claimed the homebuyers were employed by various corporations owned or controlled by the scheme's participants.
"Some of the proceeds went into the principal's pockets and some of the money would be used to service the mortgages on several properties, Spota said. "It was not difficult to keep their mortgage Ponzi scheme afloat because of the exponential growth in the early part of this decade of the east end real estate market. The defendants were able to obtain new mortgages year after year for some of these properties."
— SCDA release
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