A 70-year-old attorney from Eastchester has been convicted in federal court of a multi-million dollar mortgage fraud conspiracy, bank fraud and money laundering.
Preet Bharara, the U.S. Attorney for the Southern District of New York, said Louis Cherico was convicted after a three-week jury trial in a fraud involving three separate mortgages.
Cherico, an attorney practicing in Westchester and New York City, form July 2002 through the end of 2002 participated in a fraudulent real estate investment scheme, which had as its objective the purchase of multi-million dollar residential properties in various communities in Westchester County.
Bharara said the purchases were made with loans obtained through the submission of false and misleading information to banks and other lenders. Many of the loans were equal to, or in excess of, 100 percent of a property's actual sale price, so that Cherico and his co-conspirators did not have to put any of their own money at risk in the transactions.
Cherico served as the attorney for various co-conspirators in negotiating and closing the fraudulent purchases that were part of the scheme. Cherico and his co-conspirators submitted various documents, including loan applications, contracts of sale, deeds, real estate transfer documents, and title reports to federally insured banks, Bharara said. Those documents contained materially false or misleading information about the income, assets, existing debt and creditworthiness of the borrower, the chain of title to the property, and the sale price of the home.
Those documents also certified the borrower's intent to reside in the property as a primary residence, when, in fact, the properties were typically purchased for investment purposes.
As a result of the scheme to defraud, Cherico and his co-conspirators obtained millions of dollars in loan proceeds, enabling them to control certain properties that they otherwise would not have been able to purchase and finance.
Bharara said Cherico also laundered the illegal proceeds obtained from the sale of one of the properties used in the mortgage fraud scheme by transferring the proceeds from a bank account he controlled to an account that was controlled by one of his co-conspirators, Dominick Devito.
The transaction was designed to conceal and disguise the nature, location, source, ownership, and control of the illegal proceeds.
Cherico faces a maximum sentence of 30 years in prison on the count of conspiracy to commit bank fraud, 30 years in prison on each of the three counts of bank fraud, and 20 years in prison on the money laundering count, as well as a maximum $1,000,000 fine. Cherico was acquitted of two additional counts of bank fraud and one count of obstruction of justice. He is scheduled to be sentenced by Judge Coleen McMahon on March 6, 2012.
Bharara said the FBI assisted in the investigation and the case is being prosecuted by the Office's Organized Crime Unit. Assistant U.S. Attorneys Nicholas L. McQuaid and Jason A. Masimore are in charge of the prosecution.
