McMurray Man Pleads Guilty to Fraud, Tax Charges

March 5, 2010 - Acting United States Attorney Robert S. Cessar announced today, March 4, 2010, that John Polosky, a resident of McMurray, Pennsylvania, pleaded guilty in federal court to charges of wire fraud conspiracy and filing false tax returns.

Polosky, age 40, pleaded guilty to three counts before United States District Judge Joy Flowers Conti.

In connection with the guilty plea, Assistant United States Attorney Brendan T. Conway advised the court that Polosky participated in two different mortgage fraud conspiracies, one in the Western District of Pennsylvania and one in the Eastern District of Pennsylvania. In both conspiracies, Polosky acted as a loan officer for First Capital Home Equity, which was a mortgage broker company that assisted buyers and home owners secure financial collateralized by real estate.

Loan officers at First Capital Home Equity regularly submitted fraudulent appraisals that had been prepared by Kenneth Cowden, who was not a licensed appraiser and regularly submitted appraisals that vastly overstated the true fair market value of the properties that were serving as collateral for the loans.

Fraudulent appraisals were just one aspect of the fraud. Individuals associated with First Capital, including Polosky, regularly submitted loan applications to lenders that falsely represented the financial condition of the borrowers, including their income and assets. Those individuals also submitted fraudulent documents that supported those false representations, including pay stubs, W2s, and similar types of documents. In addition, Polosky submitted false tax returns that vastly understated his income.

Judge Conti scheduled sentencing for July 2, 2010. The law provides for a total sentence of 43 years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.

The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Polosky. The Mortgage Fraud Task Force is comprised of investigators from federal, state, and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the United States Secret Service; Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; and the United States Postal Inspection Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.

Mortgage industry members with knowledge of fraudulent activity are encouraged to call the Mortgage Fraud Task Force at (412) 894 7550. Consumers are encouraged to report suspected mortgage fraud by calling the Pennsylvania Attorney General's Consumer Protection Hotline at (800) 441 2555.