Saturday, November 7, 2015

Stinky Saturday: Rolling Ruggiero

Related: Great $cott! 

"Accomplice in Dorchester condo fraud gets nine months in prison" by Dan Adams Globe Correspondent  November 06, 2015

Joan Ruggiero, an accomplice of real estate fraudster Michael David Scott, has been sentenced to nine months in federal prison and ordered to pay $4.1 million in restitution, prosecutors said Friday.

Beginning in 2006, Scott and several associates ran a massive, multimillion dollar mortgage scam that defrauded lenders, left numerous home buyers with crushing debt, and resulted in foreclosures on dozens of Dorchester and Roxbury properties.

Now if they had been a Wall Street bank.... still walking around and got to keep the ill-gotten loot.

Scott, the subject of a 2009 Boston Globe investigation, was indicted in 2010 and pleaded guilty to fraud in June; he faces more than 20 years in prison at a Nov. 12 sentencing hearing.

Prosecutors said that even after surrendering his state license in 2012, Scott, of Mansfield, continued to carry out real estate scams. He has been imprisoned since March 2014, when federal prosecutors again charged him with fraud.

Ruggiero, a real estate agent at the time, told investigators she helped Scott recruit straw buyers and prepare falsified loan applications, according to court documents. She was charged in 2013 with wire fraud, which carries a maximum sentence of five years in prison.

Raymond Sayeg, an attorney for Ruggiero, now 78, wrote in court filings that his client was in poor health and that her extensive cooperation in the case had helped secure Scott’s guilty plea. He suggested a far lighter punishment: six months of home confinement and two years probation.

“Ruggiero — similar to other real estate professionals in the greater Dorchester and Roxbury area — was taken aback by Scott’s resources and creative approach to condominium sales,” Sayeg wrote. “They believed that (Scott) was the real deal and was going to make them all a lot of money.”

Sayeg said that when the deals began to unravel and Ruggiero tried to pull out, Scott threatened to kill her. Sayeg did not immediately respond to a request for comment.

According to prosecutors, Scott and his partners bought numerous homes in Dorchester and Roxbury and divided each into several condos. The group then recruited unwitting buyers, often from out of state, with promises that they wouldn’t be responsible for down payments or closing costs and that mortgage payments would be covered by rental tenants. The buyers were told they would reap a share of the profits when Scott sold the units, prosecutors said.

Meantime, with Ruggiero’s help, the group gave banks mortgage applications that exaggerated the buyers’ incomes, overstated the value of the properties, indicated the buyers intended to live in the properties, and said the buyers had made substantial down payments. In reality, prosecutors said, the buyers hadn’t put any money down and were unable to cover the mortgage payments.

After the 2008 housing crash, most of the condos went into default, and Scott made off with the sale proceeds, prosecutors said.



"Ex-Mansfield developer sentenced to 11 years; Scott, others participated in mortgage fraud" by Beth Healy Globe Staff  November 13, 2015

Michael David Scott, a former Mansfield real estate developer and broker charged with defrauding property investors and mortgage lenders and leaving dozens of Boston properties in foreclosure, was sentenced Thursday to 11 years in prison, according to the US attorney’s office.

Scott, 51, pleaded guilty in May to 67 counts of wire fraud, bank fraud, and money laundering.

Federal prosecutors in Boston said he conducted a massive mortgage fraud between 2006 and 2008, just before the housing collapse, ensnaring lenders and out-of-state investors.

Prosecutors said that Scott, two out-of-state recruiters, and others obtained funds to finance deals in a scam involving the conversion of multifamily homes into condominiums, many of which went into foreclosure.

Scott and his associates bought multifamily homes in Dorchester and Roxbury, promising to convert them into condominiums, and then resold the units to various straw buyers, according to the US attorney’s office.

Scott and the other defendants, charged separately, used straw buyers — investors from Virginia and elsewhere who typically never saw the properties. Scott and others used falsified documents, including claims that the buyers planned to live in the condos.

The buyers were told they wouldn’t have to put their own money into the investments, that the mortgages would be covered by rents, and that they would share in the profits on the properties.

They soon learned that what seemed too good to be true was, indeed, just that. Their experience was detailed in a Boston Globe investigation in 2009.

A real estate broker involved in the scheme, Joan Ruggiero, 78, last week was sentenced to nine months in prison and nine months of home detention for her role in what the government called a conspiracy to defraud mortgage lenders of $4 million on more than two dozen properties in Dorchester.

She also was ordered to pay a fine of $100,000 and restitution of $4.1 million to the lenders. Ruggiero pleaded guilty to one count of conspiracy in 2013.

In October, a lawyer involved in the fraud, Michael R. Anderson, 46, of Framingham, was sentenced to two years in prison and two years of supervised release. He also was ordered to pay $11 million in restitution and to forfeit $7.4 million.

Anderson, who was involved in preparing loan closing documents, in 2011 had pleaded guilty to 16 counts of wire fraud, nine counts of bank fraud, and two counts of engaging in unlawful monetary transactions.

Others who prosecutors said helped Scott in his scheme, Jerrold Fowler and Thursa Raetz, both of Norfolk, Va., each pleaded guilty to wire fraud.

Scott has been jailed since March 2014 on separate charges for allegedly defrauding a couple of nearly $200,000 on real estate transactions. That arrest took place after he had relinquished his real estate broker’s license.