The man authorities called the mastermind behind a complex mortgage fraud scheme targeting distressed properties was arrested June 7 in South Carolina and charged with being a fugitive in violation of probation.
Allen J. Seymour, 49, originally of Oxford, Mass., was charged based on two warrants for his arrest in Brookline and Worcester, according to Massachusetts Attorney General Maura Healey's office.
Seymour is expected to appear in Worcester District Court for an initial surrender hearing for violating his probation from his 2010 conviction on larceny, forgery and uttering charges in connection with a mortgage fraud scheme.
The scheme involved transforming apparent equity in distressed properties into cash.
Beginning in September 2006, Seymour targeted properties in danger of foreclosure, approached the property owners, and presented a variety of rescue options ranging from buying the property for the amount owed to the foreclosing lenders to lifetime leases and reverse mortgages to refinancing, according to authorities.
Seymour had some homeowners sign innocuous documents to start the process; documents that were substituted with pages purporting to grant power of attorney from the homeowner to other individuals including co-defendant Jason Passell of Worcester.
Seymour meanwhile found people with good credit looking to invest in real estate.
Many of the investors were told they would be helping homeowners in danger of foreclosure, and Seymour told several investors that the purchase would be temporary and the homeowners would buy the property back once Seymour repaired their credit. Others were told that Seymour's company would rehabilitate the properties and then sell them at a profit, to be shared by him and the investors.
Authorities said, however, that none of the proposals made to the investors matched the transactions presented to the homeowners. Furthermore, investors were not told of the lifetime leases and reverse mortgages promised to the homeowners.
Nearly $3 million in loans were obtained for the purchases, according to investigators. Loan documents indicated the lender believed the purchase price was far in excess of what the homeowner was selling the property for, if, in fact, the homeowner knew he or she was selling the property at all.
Oxford lawyer Raymond A. Desautels III, who has since been disbarred, conducted all of the real estate closings and pleaded guilty to charges in connection with five of them, according to authorities. The homeowners never attended because their documents were signed using a fraudulent power of attorney, authorities said.
Desautels issued proceeds checks, payable to the homeowners based on the false purchase price. Seymour and Passell, who also pleaded guilty in the case, would then cash the checks using power of attorney.
After the closings, several investors said Seymour reneged on his promise to help them make their mortgage payments and those mortgages fell into foreclosure. Some homeowners who were promised lifetime leases have been evicted as a result, authorities said.
Seymour was sentenced in November 2010 to 2 to 2 1/2 years in state prison to begin after he completed a 51-month federal sentence he was then serving in connection with an unrelated $3 million mortgage scam. The state sentence was followed by five years of probation.
Seymour is additionally expected to be arraigned early next week in Brookline District Court on charges of forgery, uttering a false writing, and larceny over $250. That investigation is ongoing, authorities said.
