Unlicensed mortgage broker pleads guilty to $4.7 million fraud scheme
On Monday, in Brooklyn Federal Court, former unlicensed mortgage broker Brent Kaufman pleaded guilty before United States District Judge Kiyo A. Matsumoto to stealing $4.7 million in mortgage refinancing proceeds that were meant to pay off the existing mortgages of his clients.
When sentenced, Kaufman faces up to 30 years in prison, as well as forfeiture and a fine of up to $1 million.
According to prosecutors, Kaufman worked as an unlicensed mortgage broker and often assisted clients in Queens and Long Island with refinancing their mortgages. At the closing for a mortgage refinancing, the money from the new mortgage is supposed to be wired to the financial institution that holds the existing mortgage so that it can be paid off.
However, between 2016 and 2019, Kaufman, together with others, engaged in a scheme to defraud Home Point Financial Corporation, LoanDepot.com LLC , United Wholesale Mortgage and other mortgage lenders by obtaining, and attempting to obtain, money and funds from the lenders by means of materially false representations.
In particular, Kaufman provided incorrect wire routing information to the lenders for the existing mortgages. Instead of wiring the funds to the correct financial institution, the funds were instead transferred to bank accounts controlled by Kaufman.
As a result, the existing mortgages were not paid off — leaving the clients with two mortgages on their homes — and Kaufman stole the funds for his own personal use.
During the period in question, Kaufman stole more than over $4.7 million, some of which he used to make mortgage payments on the existing mortgages or to eventually pay off those mortgages to avoid detection of his scheme.
When Kaufman stopped paying the existing mortgages, several of his clients’ homes were foreclosed on. Victims of the scheme ultimately suffered a loss of approximately $2.5 million.
Jacquelyn M. Kasulis, acting United States attorney for the Eastern District of New York; Michael J. Driscoll, assistant director-in-charge, FBI, New York Field Office; Robert W. Manchak, special agent-in-charge, Federal Housing Finance Agency, Office of Inspector General; and Darnell D. Edwards, acting inspector-in-charge, United States Postal Inspection Service, New York Division, announced the guilty plea.
“With today’s guilty plea, Kaufman admits to stealing millions of dollars in a brazen mortgage fraud scheme that defrauded numerous lenders and left his homeowner-clients in danger of losing their homes to foreclosure,” said Acting U.S. Attorney Kasulis. “This office is committed to prosecuting defendants like Kaufman who are driven by greed to abuse the trust of innocent homeowners.”
“Not only did Kaufman steal his victims’ money, but he also violated their trust, leaving them financially vulnerable and at risk of significant financial complications,” stated FBI Assistant Director-in-Charge Driscoll. “Collectively, his victims suffered millions of dollars in losses. Today’s guilty plea reminds us of the threat posed by those who prioritize their own financial interests above all else.”
The government’s case is being prosecuted by Assistant United States Attorneys Jonathan Siegel and Laura Mantell.
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