A Westport man was found guilty Tuesday of fraudulently obtaining more than $3.5 million in mortgage loans along with several co-conspirators, according to a news release from Tom Carson of the U.S. Department of Justice Public Information Office.
The United States Attorney for the District of Connecticut announced that a federal jury in New Haven found 49-year-old William A. Trudeau, Jr., of Westport, guilty of conspiracy and wire fraud offenses stemming from his participation in a Fairfield County mortgage fraud scheme, Carson said.
The trial before United States District Judge Janet C. Hall began on September 27 and the jury returned its verdict Tuesday afternoon, according to Carson.
“According to the evidence at trial and witness testimony, Trudeau, a property developer, was an unnamed principal in both Aspetuck Building & Development and Huntington South Associates, LLC, the latter of which was a shell company that Trudeau used to pay for personal expenses and to secure loans fraudulently,” Carson said.
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From approximately February 2004 to April 2010, Trudeau conspired with Joseph Kriz, Heather Bliss, Fred Stevens, Thomas Preston and others to defraud federally insured financial institutions and mortgage lenders, Carson said. As part of the scheme, Trudeau and his co-conspirators submitted false mortgage loan applications to financial institutions to obtain mortgages on various properties in Fairfield County in order to develop and sell the properties for profit, and to pay off debts owed to “hard money” lenders from whom they had previously obtained high interest loans, according to Carson.
“The mortgage applications, which included false income information and omitted the mortgage applicants’ true indebtedness, caused the financial institutions to issue mortgage loans on properties that Trudeau and his co-conspirators would not have otherwise been qualified to purchase, allowing the applicants to qualify for mortgages that far exceeded their ability to repay the loans,” Carson said.
As a result of a 2003 federal conviction for fraud and tax offenses, Trudeau was prohibited from owning or operating any business that was not in his own name. In addition, he was required to report all of his assets to the federal court and was ordered to pay more than $450,000 in restitution, Carson said. According to the trial evidence and testimony, Trudeau’s name did not appear on any documentation related to the loans or the properties for which the loans were obtained, and money was hidden in bank accounts that were not in Trudeau’s name in part to prevent the collection of his court-ordered restitution, he said.
“Toward the end of the conspiracy, Trudeau, with the assistance of others, sought additional monies from a private lender purportedly to complete construction on one of the properties. Trudeau claimed to have a signed purchase contract for the property when, in truth, he did not. The evidence at trial established that Trudeau took the money for uses unrelated to the completion of the property,” Carson said. “Through this scheme, the government contends that Trudeau and his co-conspirators fraudulently obtained more than $3.5 million in mortgage loans.”
The jury found Trudeau guilty of one count of conspiracy to commit bank fraud, mail fraud and wire fraud, and one count of wire fraud, according to the news release. The jury found Trudeau not guilty of two counts of bank fraud, three counts of mail fraud and two counts of wire fraud.
Judge Hall has scheduled sentencing for January 2, 2013, at which time Trudeau faces a maximum term of imprisonment of 40 years, Carson said.
Kriz, Bliss, Stevens and Preston have pleaded guilty to charges related to their involvement in this scheme. Each defendant awaits sentencing.
This matter was investigated by the FBI. The case is being prosecuted by Assistant United States Attorneys Rahul Kale and Christopher Schmeisser.
In July 2009, the U.S. Attorney’s Office and the FBI announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force is focusing on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes, and short sale schemes.
Citizens can report mortgage fraud activity by contacting the Connecticut Mortgage Fraud Task Force at 203-333-3512, or by sending an email 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 Division, 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.