(Updated, 10:45 a.m.)
NEW YORK – Authorities have arrested 485 people, including a state senator and a broker from Rhode Island, since March in the largest-ever nationwide mortgage-fraud crackdown of its kind, the U.S. Justice Department said Thursday.
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State Sen. Christopher B. Maselli, D-Johnston, was indicted for bank fraud on Thursday for allegedly falsifying bank and tax documents and lying about his income and assets to get $1.5 million in mortgages, U.S. Attorney Peter Neronha said in a statement. Maselli is a real estate attorney in North Providence.
Earlier this week, prosecutors charged Nathan Russo, a licensed mortgage broker with Action Mortgage Corp. in Cranston, with taking part over the last three years in a conspiracy led by Syed “Ali” Babar of New London, Conn., to obtain millions of dollars in real-estate loans using fake documents, according to a statement from the U.S. attorney’s office in Connecticut.
Russo is listed on state records as vice president of Action Mortgage, which was incorporated in 1997. He graduated from Bryant College, according to a 2004 wedding announcement in The Providence Journal.
During the federal enforcement effort, 1,215 criminal defendants responsible for $2.3 billion in losses faced some type of legal action, the Justice Department said. The crackdown, dubbed Operation Stolen Dreams, also included 191 civil cases resulting in the recovery of more than $147 million.
“This represents the largest collective enforcement effort ever brought to bear in confronting mortgage fraud,” Attorney General Eric Holder said at a news conference in Washington. “These schemes are despicable, they are dangerous to our economy and they will not be tolerated.”
The initiative was organized by President Barack Obama’s financial fraud task force. The FBI has more than 3,000 pending mortgage-fraud cases, almost double the number in fiscal year 2008, Holder said.
PBN Web Editor Ted Nesi contributed to this report.
