A Connecticut real estate attorney and licensed mortgage broker was sentenced to 30 months in prison for his role in a Fairfield County mortgage fraud scheme.
Deirdre Daly, acting U.S. attorney for the District of Connecticut, said Joseph Kriz partnered with William Trudeau, Jr. to purchase, develop and sell properties by defrauding banks and mortgage lenders.
As part of their scheme, court statements and documents revealed that the defendants submitted false mortgage loan applications to financial institutions in order to obtain mortgages on various properties in Fairfield County. The purpose of submitting this fraudulent information was to be able to develop and sell these assets for profit.
By doing this, the defendants were also able to pay off debts owed to “hard money” lenders from whom they had previously obtained high interest loans.
The mortgage applications included false income information and omitted the mortgage applicants’ true indebtedness, therefore causing the lenders to issue loans to the conspirators which they would not have been qualified to purchase since they don’t have the ability to repay the loans.
Through this scam, the defendants fraudulently obtained more than $4 million in mortgage loans to buy six properties in Westport and Newton, Conn. So far, lenders have lost more than $1.9 million from this scheme.
In 2008, Kriz pleaded guilty to one count of conspiracy to commit bank fraud, as well as one count of fraud in loan and credit applications and one count of mail fraud.
Meanwhile, last October, Trudeau was sentenced to 188 months of imprisonment.
