Breaking News: Worcester Men Charged In Mortgage Scam
Attorney General Martha Coakley has filed 106 indictments against two Worcester men and others in a scam that used falsified bank documents to get millions in mortgage loans.
Coakley's office alleges that Kenneth Garabedian, 51, of Worcester coordinated the production of falsified "verification of deposit" documents used by banks and mortgage lenders to determine the credit-worthiness of borrowers.
Those documents were falsified by Stephen Stapleton, who worked at Citizens Bank and Cambridge Savings Bank, and Thomas Itemere, who worked at a Bank of America Branch in Worcester, to greatly exaggerate the amounts in the bank accounts of fictitious "straw buyers." Garabedian and the bankers were working with mortgage brokers Erik Tancum and Martha Sass of Direct Finance of Hanover. Tancum and Sass would forward requests for verification of deposits to Stapleton and Itemere.
The exaggerated account information provided by the bankers was used to inflate loan amounts in what Coakley called a "widespread foreclosure rescue scheme," and the money was pocketed by Garabedian and his accomplices.
Coakley alleges that Garabedian paid Stapleton and Itemere to falsify the verification of deposit documents and introduced them to Tancum and Sass.
The scheme involved between 40 and 50 properties, all in Worcester county, Coakley said.
Coakley charged Garabedian with 10 counts of making or publishing false or exaggerated statements, two counts of aiding and abetting the misconduct of a bank employee, commercial bribery and two counts of conspiracy.
Itemere was charged with 13 counts of making or publishing false or exaggerated statements.
Stapleton was charged with 24 counts of making or publishing exaggerated statements, two counts of misconduct of a bank employee, commercial bribery and two counts of conspiracy.
Tancum was charged with 37 counts of making or publishing false or exaggerated statements, two counts of aiding and abetting the misconduct of a bank employee, commercial bribery and two counts of conspiracy.
Sass was charged with five counts of making or publishing exaggerated statements, aiding and abetting the misconduct of a bank employee and conspiracy to commit bribery.
At a press conference this afternoon, Coakley said the arrests were part of a larger, long-term investigation. "There are other individuals involved that we're tracking down," she said. The charges against Garabedian and the others are all felonies punishable by up to 10 years in prison, Coakley said. She said Citizens, Cambridge Savings and Bank of America have been cooperative with the investigation and that the crimes were not committed by the banks, but by "rogue employees."
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