Former
Mortgage Attorney’s Ponzi Scheme Defrauded Banks and Customers of More Than
$600,000
PROVIDENCE, RI—A former Rhode Island and
Massachusetts mortgage attorney pleaded guilty in U.S. District Court in
Providence today to defrauding mortgage holders and lending institutions of
more than $600,000. David L. Spector, 52, of Needham, Massachusetts, admitted
that he used the funds to operate a Ponzi scheme. Spector’s guilty plea was
announced United States Attorney Peter F. Neronha.
Spector pleaded guilty to three counts
of wire fraud and one count of money laundering. He faces up to 70 years in
federal prison, followed by up to three years of supervised release, and a fine
of up to $1,000,000 when he sentenced by U.S. District Court Judge John J. McConnell,
Jr. on August 8, 2012.
Spector admitted to the court that
between April and October 2007, he conducted real estate mortgage refinance
closings for properties in Plymouth and Lawrence, Massachusetts and Westerly,
Rhode Isladn. As part of the closing process, Spector had the proceeds of the
mortgages obtained by his clients transferred to his attorney escrow account
for the purpose of redistributing the funds to pay off existing mortgages and
other costs associated with the closings.
Spector admitted that rather than
properly distribute the funds, he used $601,962 to run a Ponzi scheme to pay
his personal expenses and to pay off previous mortgages the he had failed to
pay off. Spector admitted that in order to keep his victims from learning of
his scheme, he filed change of address forms with the mortgage companies that
had not been paid off so that the bills would go to a post office box that he
controlled.
The case is being prosecuted by
Assistant U.S. Attorney Luis M. Matos.
The matter was investigated by Rhode
Island State Police, Federal Bureau of Investigation, and Internal Revenue
Service, Criminal Investigation.
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