Schneiderman: Florida woman sentenced for role in mortgage-fraud ring that operated in Syracuse area

A Florida woman will serve six months in jail and five years probation for her role in a million-dollar, residential mortgage-fraud ring that operated in the Syracuse area.

Judge Anthony Aloi sentenced Tracie Clark, 44, of Wimauma, Florida on Thursday in Onondaga County Court, the office of New York State Attorney General Eric Schneiderman said in a news release issued Thursday.

Clark last year pleaded guilty to a felony count of residential-mortgage fraud in the second degree for preparing false documents used to obtain residential-mortgage loans.

Clark played a “vital role” in a mortgage-fraud ring led by former attorney Theresa Sanders, Schneiderman’s office said.

It operated for “years” and netted more than $1 million by preying upon first-time home buyers and institutional-mortgage lenders, it added.

“The state prison sentence announced today brings to justice a defendant who defrauded numerous first-time homeowners,” Schneiderman said in the release. “The shameful actions of the defendants in this case harmed many vulnerable New Yorkers who wanted nothing more than a chance at homeownership.”

Case background

Sanders purchased dozens of “dilapidated” homes in and around the city of Syracuse from the U.S. Department of Housing and Urban Development, using powers of attorney in the names of family members, Schneiderman’s office said.

Sanders then advertised the homes as rent-to-own opportunities, seeking out first-time home buyers with low credit, who were now offered the chance to own their own homes with no down payments and no closing costs.

Sanders promised to work with the buyers to improve their credit. They could then obtain first-purchase mortgages to buy the homes that they inhabited after one year of renting the property, according to the news release.

In anticipation of the sale of each property to a tenant, Sanders obtained a second appraisal, typically from appraiser Steven Essig, which was higher than the previous appraisal she had ordered.

The “inflated” appraised values enabled Sanders to apply for refinance amounts to financial lenders that were “significantly” higher than the actual values of the properties, Schneiderman’s office said.

After tenants had paid rent for about one year to AFA America, a shell company that Sanders owned, Clark prepared forged mortgage-loan applications for the properties. Rather than submitting the tenants’ mortgage applications as first-time homeowners, Sanders and Clark submitted applications for refinances of the properties.

Sanders and Clark fraudulently listed AFA America as holding a first mortgage on the property, although AFA America had made no such mortgage loan to the tenants. Institutional lenders, believing they were paying off underlying mortgages AFA America held, wired closing funds to accounts that Sanders controlled and she then “pocketed the money,” Schneiderman’s office said.

To prevent discovery of their crimes, the defendants used a “variety of excuses” to withhold the deeds to the properties from the buyers.

That resulted in numerous additional hardships for the buyers, stemming from their “difficulties in demonstrating that they were the rightful owners of the properties.”

Clark is the fifth and final participant sentenced in the mortgage-fraud ring, Schneiderman’s office said.

Previously, Sanders was sentenced to 2 1/3 to 7 years in state prison for her role in the scheme.

Michelle Powers, a licensed attorney who conducted the closings for the refinanced loans, was sentenced to 6 months in jail and 5 years probation.

In addition, Essig and property manager Paul Sakowski were also convicted of felonies and were each sentenced to 5 years probation.

Contact Reinhardt at ereinhardt@cnybj.com