Manhattan US Attorney Charges Lawyer With Multi-million Dollar Mortgage Fraud, Obstruction of Justice, Money Laundering

LawFuel.com – US Attorney Newswire
PREET BHARARA, the United States Attorney for the
Southern District of New York, and JOSEPH M. DEMAREST, JR., the
Assistant Director-in-Charge of the New York Office of the
Federal Bureau of Investigation (“FBI”), announced the unsealing
of an Indictment yesterday charging LOUIS CHERICO, a lawyer who
practiced in New York City and Westchester County, with
participating in a wide-ranging scheme to commit mortgage fraud,
obstruction of justice, and money laundering.
According to the Indictment filed in Manhattan federal
court:
From July through December of 2002, CHERICO
participated in a fraudulent real estate investment scheme which
had, as its primary objective, the purchase of multimilliondollar
residential properties in various communities in
Westchester County, New York, including Purchase, Eastchester,
and Rye, with loans obtained through the submission of false and
misleading information to banks and other lenders. Many of the
loans were equal to or in excess of one hundred percent of a
property’s actual sale price, so that the defendant and his coconspirators
did not have to put any of their own money at risk
in the transaction.
CHERICO served as the attorney for various coconspirators
in negotiating and closing the fraudulent purchases
that were part of the scheme. CHERICO and his co-conspirators
submitted to numerous federally-insured banks various documents,
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including loan applications, contracts of sale, deeds, real
estate transfer documents, and title reports. Those documents
contained materially false or misleading information about the
income, assets, existing debt and credit-worthiness of the
borrower, the chain of title to the property, and the sale price
of the home, as well as the borrower’s intent to reside in the
property as a primary residence, when, in fact, the properties
were typically purchased for investment purposes. As a result of
the scheme to defraud, CHERICO and his co-conspirators obtained
millions of dollars in loan proceeds, enabling them to control
certain properties that they otherwise would not have been able
to purchase and finance.
The Indictment also charges CHERICO with laundering the
illegal proceeds obtained from the sale of one of the properties
used in the mortgage fraud scheme by transferring the proceeds
from a bank account controlled by CHERICO to an account that was
controlled by one of his co-conspirators, DOMINICK DeVITO. The
transaction was designed to conceal and disguise the nature,
location, source, ownership, and control of the illegal proceeds.
The Indictment further charges CHERICO with obstruction
of justice, and conspiracy to obstruct justice, in connection
with the 2003 sentencing of DOMINICK DeVITO, following DeVITO’s
conviction in United States v. Pasquale Parello, et al.,(01 Cr.
1120) in United States District Court for the Southern District
of New York on charges of racketeering and mortgage fraud.
Specifically, CHERICO assisted DeVITO in concealing profits that
DeVITO earned from the sale of a property located in Purchase,
New York, and in submitting an affidavit containing false and
misleading information about the sale to the United States
Probation Office.
* * *
CHERICO, 69, of Eastchester, New York, was arrested
this morning and was presented and arraigned this afernoon in
Manhattan federal court. The case has been assigned to United
States District Judge COLLEEN McMAHON.
If convicted, CHERICO faces a maximum sentence of 30
years in prison on each of the six counts of mortgage fraud, 20
years in prison on the money laundering count, 10 years in prison
on the obstruction count, five years in prison on the conspiracy
to obstruct justice, and a fine of the greater of $1,000,000, or
twice the gross gain or loss resulting from the crime.

Mr. BHARARA praised the work of the FBI.
This case is being prosecuted by the Office’s Organized
Crime Unit. Assistant United States Attorney JONATHAN B. NEW is
in charge of the prosecution.
The charges contained in the Indictment are merely
accusations, and the defendant is presumed innocent unless and
until proven guilty.
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