Indictments filed in Massachusetts Mortgage Fraud

Acting United States Attorney General for the District of Massachusetts, Michael K. Loucks and Special Agent in Charge of the United States Secret Service, Steven D. Ricciardi publicized in a press release on August 30th the indictment of four Massachusetts residents for their scheme to defraud mortgage lenders to acquire real estate under false pretenses.

The defendants Steven Soto, 24, currently in jail for theft of motor vehicle; Pedro Soto, 44 and Carmen Soto, 44, both of Springfield Massachusetts and Kimberly Litwin, 52 of Lynn, Massachusetts have all been charged with thirteen counts of mail fraud and identity theft.

The four defendants according to the indictment were involved in a scheme to defraud mortgage lenders by submitting false documents and providing fraudulent documents to the Registry of Deeds. The scheme took place between 2006 and 2007 and entailed the use of stolen identities to acquire mortgage loans via fraudulent mortgage applications. They falsified HUD 1 statements in order to divert funds and claimed that they were legal fee for services rendered. The four defendants used the proceeds from the loans they acquired for self benefit.

The defendants ran their scheme through a company called Paradise Real Estate which operated out of Lynn, Massachusetts. The defendants used false identities on mortgage applications; falsified income, liabilities, assets and employment information on those applications; submitted them to lending institutions. They also used straw-buyers to acquire some of the mortgage loans. The falsified closing documents in order to ensure the lenders would fund the fraudulent loans. The mortgages obtained by the group have all gone into foreclosure.

The properties involved in the groups’ scheme included the following:

• 242 Main Street and 399 Orange Street in Springfield, Massachusetts
• 55 Lawrence Street, Units 1,2 and 3 in Salem, Massachusetts
• 21 Dudley Street, Units 1 and 2 in Haverhill, Massachusetts

The defendant in the case are subject to a maximum sentence of twenty years for each count of mail fraud, up to a two hundred fifty thousand fine and an order to pay restitution to their victims. They also face an additional mandatory sentence of two years in prison for the identity theft.

Loucks commended the United States Secret Service, the Massachusetts State Police, and The Lynn Police Department for their efforts in the investigation. Assistant United States Attorney John A. Capin will be prosecuting the case.

Loucks affirms that an indictment is merely an allegation of criminal activity and that the defendants are presumed innocent until proven guilty in a court of law.