Real Estate Attorney Sentenced For Mortgage Fraud Scheme

Posted by Patrick Barnard on June 18, 2013 No Comments
Categories : Residential Mortgage

A Connecticut man has been sentenced to 30 months in prison for his role in a Fairfield County mortgage fraud scheme.

Real estate attorney and broker Joseph Kriz, 50, of Wilton was sentenced on Friday, May 31, by U.S. District Judge Janet C. Hall in New Haven for devising a scheme to defraud banks and mortgage lenders.

In February, two of Kriz' co-conspirators, William A. Trudeau Jr. and his wife, Heather Bliss, were sentenced to 188 months and 30 months, respectively, for their involvement in the scheme.

According to the Department of Justice, Kriz, Trudeau, Bliss and others submitted false mortgage loan applications to financial institutions to obtain mortgages on various properties in Fairfield County. They claimed they wanted to develop and sell the properties for profit in order to pay off debts owed to "hard money" lenders from whom they had previously obtained high interest loans.

The mortgage applications, however, included false income information and omitted the mortgage applicants' true indebtedness, resulting in the banks issuing loans on properties that Trudeau, Kriz and their co-conspirators would not have otherwise been qualified to purchase. This in turn enabled them to qualify for mortgages that far exceeded their ability to repay.

Through this scheme, Trudeau, Kriz and others fraudulently obtained more than $4 million in mortgage loans to purchase six properties in Westport and Newtown. To date, mortgage lenders have lost more than $1.9 million.

In addition, Kriz stole approximately $3.5 million from his Interest on Lawyer Trust Account (IOLTA) in order to service the various loans he and his co-conspirators had taken to secure the properties.

Trudeau also defrauded private lenders of a total of more than $1 million.

On August 4, 2008, Kriz pleaded guilty to one count of conspiracy to commit bank fraud, one count of fraud in loan and credit applications, and one count of mail fraud. He cooperated with the investigation and testified at Trudeau's trial.

On October 9, 2012, a jury found Trudeau guilty of one count of conspiracy to commit bank fraud, mail fraud and wire fraud, and one count of wire fraud. On February 12, he was sentenced to 188 months of imprisonment.

The case, resulting from an FBI investigation, was prosecuted by assistant U.S. attorneys Rahul Kale and Christopher Schmeisser.

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