David B. Fein, United States Attorney for the District of Connecticut, announced that Michael Hodges, 53, of New London, was sentenced today by Senior United States District Judge Alfred V. Covello in Hartford to 18 months of imprisonment, followed by two years of supervised release, for his participation in an eastern Connecticut mortgage fraud scheme. Hodges also was ordered to forfeit $25,000 and to pay restitution in the amount of $328,516.31.
According to court documents and statements made in court, from approximately 2004 to 2007, Jose Guzman and others used mortgage brokerage, property management, and home improvement companies to arrange for individuals (“buyers”) to purchase real estate, primarily residential housing properties located in New London County, by obtaining funding from various mortgage companies and mortgage originators after submitting false information on the buyers’ mortgage loan applications. The fraudulent information included information regarding income, assets, employment, rent history, as well as the buyers’ intention to make the properties their primary residences. The buyers were compensated for participating in the scheme.
Hodges, who was unemployed at the time, acted as a buyer in connection with Guzman’s purchase of one property in New London in 2006 and one property in Norwich in 2007. Hodges also referred individuals to Guzman to act as buyers and identified properties to be bought and sold as part of the conspiracy. Hodges received $5,000 both times he acted as a buyer and additional compensation when he identified a buyer or a property to be bought and sold.
According to previously filed court documents, the government believes that more than 200 fraudulent mortgages were funded through this mortgage fraud scheme, causing more than $9 million in losses to lenders.
On October 12, 2011, Hodges pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud. Fifteen other individuals, including Jose Guzman, have been convicted of various charges stemming from this scheme. Guzman awaits sentencing.
This case has been investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant United States Attorneys Michael S. McGarry and David T. Huang.
In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an e-mail to firstname.lastname@example.org.
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service-Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General; and State of Connecticut Department of Banking.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.