A New York loan broker was indicted for conspiring to defraud 350 financially capable customers of $1.2 million who wanted to obtain private lender loans to acquire a new home.
Kenneth Enrico was arraigned on a federal indictment with one count of conspiracy, three counts of mail fraud and 13 counts of wire fraud. The federal grand jury indicted Enrico on Feb. 19.
According to documents presented in court, between June 2011 and August 2012, Enrico offered property buyer’s private lender loans of 105% of the property’s selling price at a 4.99%
To lock in this interest rate, Enrico required the buyers to pay him an upfront fee of $2,500 per loan. Enrico said this requested fee covered loan processing fees and the appraisal.
This scam was publicized by Enrico through several brokers, two of whom were located in the Atlanta metropolitan area. Furthermore, the broker also added more fees for the buyer to pay if they wanted to participate in this transaction.
Even though more than 350 individuals responded to Enrico’ offer and sent approximately $1.2 million in upfront fees either to the defendant or through the brokers, none of the buyers ever received a loan from him that they were promised, the U.S. attorney’s office said.
Enrico provided the buyers with several excuses as to why their loans never closed, court evidence revealed, but this did not help the borrowers. At the end of the day, the buyers lost the money they paid to Enrico as well as the money they paid to the sellers to acquire second properties they were trying to buy when their sales contracts expired.
“The public is once again reminded that if a deal sounds too good to be true, it usually is,” said Sally Quillian Yates, U.S. attorney for the Northern District of Georgia. “The charges against Enrico reflect our continuing commitment to protect our more financially vulnerable victims from the fraudsters who prey upon them.”
The charges filed against Enrico each carry a maximum statutory penalty of 20 years in prison and a maximum fine of $250,000.
