Brooklyn Attorney Convicted in Mortgage Fraud Scheme

Alexander Kaplan of Brooklyn, New York, was found guilty in Manhattan federal court of participating in a multimillion-dollar mortgage fraud scheme. According to the evidence at trial, from late 2004 through January 2007, Kaplan and his coconspirators, using straw buyers, obtained hundreds of mortgage and home equity loans by submitting loan applications and supporting documents that contained information about, among other things, the prospective borrower's employment, income and assets and intent to reside in the property in question, as well as the fair market value of the property. Additionally, Kaplan and his co-conspirators, using artificially inflated appraisals, sought and obtained mortgages at values that exceeded the properties' actual sale prices and true market values. Kaplan served as the attorney for the straw buyers and the banks in the closings of sales of 10 rent-regulated condominium apartments on the Upper West Side of Manhattan. None of the documents submitted to the lenders in these transactions disclosed that: certain buyers were seeking loans to purchase more than one apartment as a primary residence; each of the apartments was already occupied by a tenant and therefore not suitable for a primary residence; or the apartments were subject to rent regulation laws that precluded the buyer from charging the reported rents. Kaplan presided over the closings and obtained false documents. Almost all of the apartments were then resold to straw buyers within a matter of months. The purported sales prices for each of the flips were almost twice the initial purchase price and Kaplan's co-conspirators obtained almost $13 million in additional loans on the apartments. Of the 26 other defendants originally charged with Kaplan, 25 have pleaded guilty. Sentencing for Kaplan is for May 1, 2009.