November 14, 2008
False Statement Conviction Results In Disbarment
A lawyer who had been convicted of violation of the federal false statement provisions of 18 U.S.C. section 1001 was summarily disbarred by the New York Appellate Division for the Second Judicial Department. The court held that the conviction involved a crime that was essentially similar to a felony under New York law. The facts:
...the respondent admitted that between June 23, 2000, and October 19, 2000, he owned and operated Port Abstract Title Company in Garden City and acted as closing agent for residential mortgages generated by The Neighborhood Mortgage Bank for New Jersey properties. During that time, the respondent loaned money to Barry Fauntleroy, the owner and operator of EON Real Estate investment company, to purchase dilapidated homes to sell at a profit. At the respondent's direction, employees of Port Abstract prepared HUD-1 Real Estate Settlement forms which contained materially false information for residential mortgage loans on the properties he and Fauntleroy owned and were selling. The respondent collected fees for the issuance of real estate title insurance policies, as well as for his work as a closing agent, associated with the sale of the properties.
At the respondent's direction, his employees created Real Estate Settlement HUD-1 forms which contained materially false information with respect to funds provided by the purchasers of properties he sold which were funded through mortgages generated by The Neighborhood Mortgage Bank. The respondent submitted these and other related documents to The Neighborhood Mortgage Bank for inclusion into the mortgage loan file which was submitted to HUD. The respondent knowingly took these actions for the purpose of inducing HUD to insure mortgages generated by The Neighborhood Mortgage Bank based on materially false and misleading information. The respondent received monetary compensation for his participation in this scheme. The respondent admitted that his actions were taken with intent to defraud and that he was, in fact, guilty as charged.
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