U.S. Attorney Charges Cranberry Attorney, 14 Others, in Wide-Reaching Mortgage Fraud Scheme

On the three-year anniversary of the formation of the Western Pennsylvania Mortgage Fraud Task Force, the U.S. Attorney's office in Pittsburgh is filing charges against 14 individuals associated with seven different mortgage fraud schemes, including a Cranberry Township lawyer with an office in the community.

The individuals charged include a closing attorney, mortgage brokers, real estate investors, and a bank employee. The seven schemes involved approximately 320 properties and $75 million in fraudulent loans.

On Tuesday, a federal grand jury in Pittsburgh returned a six-count indictment charging James C. Platts, 59, of Wexford; Dean Haggerty, 36, of 112 Oticon Drive, New Castle; and Bernard J. Flugher, 62, of 202 Sandalwood Drive, Cranberry Township, with mail fraud, mail fraud conspiracy, and money laundering in connection with a mortgage fraud scheme.

According to the information presented to the court, Platts was the president and treasurer of Easy Realty Solutions; Haggerty was employed with S&P Mortgage; and Flugher is an attorney who conducted real estate closings at an office in Cranberry Township.   

The fraud involved the submission of fraudulent documents falsely verifying that borrowers paid rent and falsely verifying borrowers' bank account balances, according to U.S. Attorney David Hickton.

The scheme also involved fraudulent loan applications that overstated the income and assets of borrowers, and the deposit of funds into borrowers' accounts to make it falsely appear as though they had the assets to make the down payment required at closing, according to him.

The real estate closing involved fraudulent settlement statements that falsely reported that the borrowers had made substantial down payments associated with the purchase of the properties.

The settlement statements also included payments to Platts for fraudulent liens that had been filed against the properties serving as collateral for the loans.

One of the transactionsinvolved property located at 2918 Shadeland Ave. in Pittsburgh's North Side neighborhood. The indictment said Flugher purchased a bank check in an amount equal to the amount that the borrowers were supposed to bring to the closing from the borrowers' own fund, and then deposited that check back into his account.

Flugher, however, provided a copy of that check to the lender as if the check had been presented to him by the borrowers at the closing as their down payment.

Flugher also prepared and submitted to the lender a fraudulent settlement statement that falsely reported the borrowers had made a substantial down payment when, in fact, they had not, according to Hickman’s office.

The U.S. Attorney also filed charges people associated with Lender’s Corner, Absolute Settlement and MCM Consulting and Management, Alico Mortgage and US Funding Partners, Pittsburgh Home Loans and Riverside Mortgage, Richard Underhill, and Beaver Financial Services.