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Attorney sentenced for mortgage fraud scheme that affected M&T Bank

A Rockland County attorney who was convicted of a felony for his role in a mortgage fraud scheme that affected M&T Bank was sentenced to four months in prison, the U.S. Attorney's Office for the Western District of New York announced Thursday.

Laurence Savedoff of New City, N.Y., was sentenced by Chief U.S. District Court Judge Frank P. Geraci Jr. following Savedoff's conviction of misprision of a felony. The crime of misprision of a felony occurs when a person is aware that someone has committed a felony offense and both fails to notify the authorities of its occurrence and also takes steps to aid in its concealment.

Prosecutors stated that between 2008 and 2009, Savedoff represented the Funding Source, a mortgage bank, as the settlement attorney. The defendant’s law office was used to execute the closings for eight real estate transactions for properties located in Bronx which involved efforts by five other individuals fraudulently to obtain mortgages that were insured by the Federal Housing Administration on behalf of unqualified borrowers.

For all eight transactions, Savedoff signed legal documents knowing they were false, prosecutors said. Although he did not know the full extent of the scheme, prosecutors said, Savedoff became aware that others were using him to help defraud financial institutions. They say he failed to notify authorities of the fraud and took steps to actively conceal the fraud by signing – or having his paralegal sign – documents that would be sent to banks, including M&T Bank.

Documents were sent to financial institutions to show that the borrowers met FHA’s requirement of providing a down payment of 3 to 3.5 percent. Prosecutors said the defendant was aware that the borrowers in all eight transactions did not provide that down payment. Savedoff certified that those disbursements were accurate, and banks including M&T Bank purchased the fraudulently originated loans from TFS.

The total amount of the mortgage loans for these eight transactions was $4,800,007.

The case was handled by assistant U.S. Attorneys Elizabeth R. Moellering and Kathleen A. Lynch. The sentencing is the culmination of an investigation by the United States Postal Inspection Service, the United States Department of Housing and Urban Development, Office of the Inspector General and the Federal Bureau of Investigation.

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