Pennsylvania couple convicted in mortgage fraud scheme

Reuters News
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Posted: Jun 22, 2011 4:24 PM
Pennsylvania couple convicted in mortgage fraud scheme

PHILADELPHIA (Reuters) - A Pennsylvania husband and wife were convicted on Tuesday in federal court for what prosecutors said was a $14.6 million mortgage fraud scheme that targeted financially distressed homeowners.

Edward and Jacqueline McCusker, both 47, of New Hope each face up to 240 years in prison, fines of up to $3.25 million and possible forfeiture of money made from the scheme totaling $14.6 million, according to the U.S. Attorney's Office.

The couple "targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers and obtained dozens of fraudulent mortgages," prosecutors said in a statement.

Under the scheme, Axxium Mortgage Co., operated by the McCuskers, would promise homeowners it would find an investor to help them save their homes, prosecutors said.

The couple would arrange for a so-called straw purchaser -- someone posing as a buyer -- to get a fraudulent mortgage and transfer title of the home to that purchaser. Then they would take whatever equity was left, put some in a shell company to pay the new mortgage and pocket the rest, prosecutors said.

Another operator of Axxium, John Bariana, pleaded guilty in the case earlier. Prosecutors said he and Jacqueline McCusker each acted as straw purchasers for 10 homes.

Bariana is awaiting sentencing.

(Reporting by Dave Warner, editing by Ellen Wulfhorst and Greg McCune)