In the midst of the housing bubble bursting, two attorneys from Forest Hills were setting up millions of dollars of mortgages taken out under straw-man borrowers and paying themselves attorneys’ fees from the bogus deals.
The scheme revolved around attorneys Matthew Burstein and Aaron Rabinowitz applying for mortgages using names of people who had no intent of paying back the money.
The two lawyers represented both the bank and borrower in the transaction, and after the deals went through they made off with attorneys’ fees they paid themselves.
The bogus mortgages where then left to default.
Between January 2006 and September 2008, the two took out $25 million worth of mortgages under fake names from their law firm in Forest Hills.
Both men were convicted of ten felony counts connected to the dealings in federal court on Sunday after a seven-day jury trial.
According to evidence brought to light in the trial, the two lawyers worked with co- conspirator real estate agents and loan officers to recruit fake buyers, falsify paperwork.
They used those documents to coax loans out of Countrywide Financial, Fremont Investment and Loan, IndyMac Bank, Sun Trust Mortgage, Inc., Wells Fargo & Company and New Century Mortgage Corporation.
As a result, millions of dollars of the mortgages they secured from those companies are now in default.
“The defendants violated the trust placed in them as attorneys and further damaged the integrity of the real estate market,” said United States Attorney Loretta Lynch. “We will vigorously investigate and prosecute those who engage in mortgage fraud, including professionals who jettison their responsibility to reap rewards from the fraud.”
Burstein and Rabinowitz are scheduled to be sentenced on Nov. 26 and cold get a maximum of 30 years in prison.
Prosecutors are also trying to force Burstein and Rabinowitz to turn over any proceeds from their crimes and force them to pay restitution.