A woman hired to help struggling Western New Yorkers save their homes from foreclosure has been accused of lying and stealing their money so she could gamble at local casinos.
Lori J. Macakanja, 35, of Dunkirk, was fired last year as a housing counselor for HomeFront Inc., a not-for-profit agency on Delaware Avenue in Buffalo.
The U.S. Attorney's Office claims Macakanja stole about $200,000 from about 100 clients who went to the agency for help in fighting foreclosures. She was charged Friday with felony counts of mail fraud and falsifying documents.
Those alleged to have been victimized include a woman with multiple sclerosis who uses a wheelchair. According to court papers filed by prosecutor Trini E. Ross, the woman was so desperate to keep her home that she sold off her deceased mother's wedding and engagement rings for $2,670 and gave the money to Macakanja.
But instead of using the funds to avert foreclosure, Macakanja used the money for her own purposes, the court papers said.
"Macakanja's clients usually experienced hardships, such as a job loss, divorce, illness [or] disability, which led to their inability to pay their mortgage," Shelley K. Carosella, a federal postal inspector, said in a criminal complaint.
"[Macakanja] falsely told her clients that this money would be held in 'suspense' until the bank needed a payment. [Macakanja] admitted she spent these funds at local casinos."
Carosella said victims told her that, in their dealings with Macakanja, the housing counselor always insisted they give her cash or a money order. She then promised to use the money to rearrange their mortgages and help them keep their homes.
On two occasions, Macakanja made payments on her own mortgage with money taken from clients, prosecutors alleged.
Officials at HomeFront dismissed Macakanja and cooperated with the investigation after learning of the crimes, and none of the agency's other employees have been accused of wrongdoing, authorities said.
Brian M. Cacciotti, CEO of HomeFront, told The Buffalo News on Friday that Macakanja's actions were totally out of step with the agency's procedures and its mission.
"These were the willful acts of a rogue employee," Cacciotti said. "Our mission is to help people."
Will HomeFront make sure that everyone who was cheated gets his or her money back?
Cacciotti said efforts are being made to help the victims, but he made no guarantees.
"We're doing everything we can to possibly help these individuals," he said. "We've submitted information to our insurers and are waiting to hear from them. I'm neither optimistic nor pessimistic."
The News initially reported on the federal investigation Nov. 17.
When confronted by federal agents in late October, Macakanja, according to court papers, told them, "I know why you are here, and I want to plead guilty to everything."
Founded in 1975, HomeFront has eight employees and a volunteer board of directors. The agency says that, since 1998, it has helped more than 1,100 people purchase their first home. The agency provides counseling and education to people who are trying to buy a home, or are struggling financially to keep one.
The agency told The News last year that it has an annual budget of about $2.2 million and that it works closely with federal, state and local governments. Its funding comes from grants and charitable organizations.
Brian P. Comerford of the federal public defender's office, who is representing Macakanja, said he could not comment on the case until after his client's first court appearance, which is scheduled for 11 a.m. Tuesday.
Agencies that worked on the probe included the Mortgage Fraud Task Force of Western New York, the U.S. Postal Inspection Service and the U.S. Department of Housing and Urban Development's Inspector General's Office.
James P. Harrington, an attorney for HomeFront, said allowing the actions of one employee to tarnish the agency's good work in the community would be unfair.
Ross said prosecutors are exploring every avenue to help victims get their money back, which he described as a "top priority."