The assistant manager of Gambrills Mortgage Company has been sentenced to over four years in prison for conspiracy to commit wire fraud in connection with a five-year scheme to divert mortgage payoff funds from clients’ who were closing on 17 Maryland properties.
Todd Bettin worked at the Gambrills, Md.-based company that provided settlement services and sold title insurance policies to clients who were buying homes or refinancing existing properties.
In 2007, Bettin refinanced the mortgage on his home. Gary Pierce, the owner of At Home Mortgage, acted as the settlement agent.
Rather than paying off the original mortgage as required, Bettin kept the payoff amount and never informed the original lender that he had refinanced the property. Also in 2007, Pierce obtained a mortgage loan on a property in Edgewater that he did not own. Bettin acted as the loan officer on the transaction.
Both conspirators created false documents purporting to show that Pierce owned the property and provided those fraudulent documents to the lender. They then used the funds obtained from the lender to perpetuate the scheme and each personally diverted $50,000 to themselves.
Since this scheme was successful, Bettin and Pierce started to hold mortgage payoff funds from clients’ closing for a matter of days, weeks, and sometimes years.
According to Pierce’s plea agreement, he falsely represented on HUD-1 forms sent to the borrower’s lender that the payoff was made, when in fact, the conspirator intended to divert the funds. The conspirators fabricated wire confirmation reports, which purported to be a bank record of the transfer, to include in loan files. These were created in advance of audits in order to deceive the title insurers.
Additionally, to prevent the lenders from detecting this scheme, Bettin and Pierce contacted the mortgage lender who should have been paid off and posed as the borrower/homeowner.
Bettin then made monthly mortgage payments to the existing lender. Meanwhile, believing that that bank had been paid off as a result of the settlement, the borrower stopped making their payments on the mortgage. Subsequently, since the bank was receiving payments from Bettin, they had no reason to notify the borrower of any delinquency.
With no delinquency in the account, the scheme went undetected. The total amount improperly obtained by the conspirators was nearly $5 million.
Additionally, since the existing mortgages were not paid off, the liens against the property were not removed and clear title could not be passed to the new lender and borrower.
Besides 51 months in prison, Pierce was ordered to pay more than $3.3 million in restitution.
Pierce was sentenced to six years in prison and ordered to pay restitution of at least $4 million.
