Connecticut Man Sentenced to More Than Four Years for Scamming Lenders

Edward J. Safdie of Madison, Conn., was sentenced to 51 months in prison for conducting a fraud scheme in which he received funding from multiple sources to purchase a Chester, Conn.-based inn. According to Nora R. Dannehy, U.S. attorney for the District of Connecticut, Safdie submitted false documents to Acorn Capital overstating his personal wealth to receive a $1 million loan to secure financing to purchase The Inn at Chester. He then told Citizens Bank, also submitting false documents to the lender, that the $1 million loan from Acorn was his own and that he was using the funds for a downpayment on the inn. Operating through 318 Main LLC, Safdie purchased the inn for $2.4 million. On the same day, he caused 318 Main LLC to sell the inn to Quantum 318 LLC, which he also controlled, using $3.5 million in loan proceeds obtained from Citizens Bank. He then used the proceeds from the Citizens Bank loan to pay back the original $1 million Acorn loan. Thereafter, Safdie convinced Acorn to provide him with a $2 million revolving loan facility, of which he drew down $1.1 million. He continued to provide fabricated brokerage account statements to Acorn. Using the inn as security, Safdie refinanced the Inn and, through the refied mortgage, received $4.5 million from Beal Bank. Safdie then used most of the funds to repay the fraudulently obtained Citizens Bank loan. After failing to repay the Beal Bank loan, Beal Bank foreclosed on the inn.