Saturday, July 30, 2011

Anna McElaney Sentenced to Federal Prison for Defrauding Bank in Short Sale Mortgage Fraud Scheme


David B. Fein, United States Attorney for the District of Connecticut, announced that ANNA McELANEY, 40, of Norwalk, was sentenced today by United States District Judge Janet C. Hall in Bridgeport to eight months of imprisonment, followed by three years of supervised release, the first six months of which McELANEY must spend in home confinement, for her involvement in a “short sale” mortgage fraud scheme.

A short sale transaction involves a mortgage holder or lender entering into an agreement to release its mortgage or lien on real property in exchange for payment of less than the total amount owed on the underlying debt. Many short sale transactions are legitimate.

According to court documents and statements made in court, McELANEY, a real estate agent, and Sergio Natera, also a real estate agent, defrauded Regions Bank, which held two mortgages on a residential property in Bridgeport. On December 5, 2007, McELANEY, who was a listing agent for the property, received an offer to purchase the property for a price of $132,500. However, McELANEY and Natera informed Regions Bank that the highest offer to purchase the property was for $102,375 and that it was made by BOS Asset Management, LLC. McELANEY and Natera concealed from Regions Bank that there was a higher offer by another bidder, that Natera owned BOS Asset Management, LLC, and that McELANEY and Natera planned to keep the difference between the two prices. Based on the false and incomplete information provided to it, Regions Bank agreed to the short sale for the lower price, and released its mortgages on the property.

On June 9, 2008, McELANEY and Natera arranged for two sales of the property to occur on the same day. The first sale was from the owner of the property to BOS Asset Management, LLC for $102,375; the second sale was from BOS Asset Management, LLC to the original bidder on the property for $132,500. McELANEY and Natera retained the difference between the two sale prices.

“This prosecution should serve as a warning to real estate agents and others who seek to take advantage of the current financial crisis by defrauding lenders through short sale fraud schemes,” stated U.S. Attorney Fein.

On February 19, 2010, McELANEY pleaded guilty to one count of bank fraud. Natera pleaded guilty to the same charge on February 11, 2010. He awaits sentencing.

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