Government Entities Crack Down On Bridgeport Mortgage Fraud, Nets One Conviction [Archive]

FraudNews

10-17-2011, 10:41 PM

MarleenShillingford, 44, of Long Island, recently pled guilty for her part in a multi-million dollar mortgage fraud system that comprised of over 40 Bridgeport multi-family homes.

Shillingford, a Nesconset, N.Y. resident, was one of Waikele Properties Corp. owners; which was a firm that purchased and sold Bridgeport real estate from 2001 until August 2011.

Rather than hearing the indictment against her, Shillingford pled guilty to one count of conspiracy to commit money laundering and one count of conspiracy to commit wire fraud in Hartford’s U.S. District Court.

In a statement by District of Connecticut U.S. Attorney David B. Fein, “The decade-long system had dozens of Bridgeport properties that wound up being foreclosed on, which destroyed neighborhoods and costing mortgage lenders millions of dollars.

The latest sale by Waikele Properties Corp. was on Sheridan Avenue for the sum of $218,000 and it was made in August.

According to the U.S. attorney’s office, the fraud that Shillingford and her four co-conspirators took part in had a couple phases:

The first one began in 2001 and ended in 2006; they bought Bridgeport homes at very low prices, allegedly using fake documents to obtain mortgages and then they’d sell those homes at a much higher price.

The second phase began in 2006 where the group allegedly purchased Bridgeport’s vacant lots, built homes on them and then sold them to folks who couldn’t afford them or to fake buyers. The two scenarios had the same outcome: homes went into foreclosure, eroded the city’s market even further and disrupted the lives of renters.

Bridgeport’s mayor Bill Finch applauded the prosecutors and investigators for the work they did in going after the fraud. He said foreclosures resulted in neighborhoods deteriorating and reduced property values. And, he said, innocent folks were robbed of a place to live through not their own fault.

According to the DA, Shillingford and her partners drafted up letters from employers, bank records earning statements, all of which were fake, to obtain the loans. When approved, Shillingford and partners would take the money they obtained illegally and put into the company’s bank account, later transferring it to their personal accounts.

There were several straw owners who never lived in the homes as their primary residence and defaulted on the loans. Federal officials said mortgage lenders ended up suffering more than $7 million in losses.

Shillingford’s sentence will be on Dec. 30 and given by U.S. District Judge Robert. N. Chatigny. She could spend up to 40 years in prison. The government, in the meantime, is looking to seek custody of 20 Bridgeport properties and approximately $26,000 seized from the company’s bank account.

The investigation into the company involved many entities including the U.S. HUD inspector general’s office, the FBI and the IRS, to name a few. David T. Huang and Douglas P. Morabito, assistant U.S. attorneys, are the prosecutors on the case.