Following a two-year investigation in Massachusetts, thanks to a referral by the Massachusetts Division of Banking, an Oxford-area man has been arraigned in regards to a complicated mortgage scheme. Allen Seymour, 42, used fraudulent documents to deceive homeowners and mortgage lenders into multiple real estate transactions on homes in danger of being foreclosed on in Worcester County. Seymour was charged with four counts of Forgery, eight counts of Uttering, 12 counts of Inducing a Lender to Part with Property and Larceny by False Pretenses.
The investigation began first by looking into the alleged creation of fraudulent Verifications of Deposit – a document used to prove a borrower’s assets to a lender. Five individuals were indicted on these counts, including mortgage banker Erik Tancun who had allegedly been creating these fake documents.
The second part of the investigation focused on 14 real estate transactions in Worcester County. According to the authorities, Seymour went after properties dangerously nearing foreclosure. He approached the homeowners and presented various “rescue options.” For homeowners just simply wanting to sell the home and avoid foreclosure, Seymour would offer to buy the property for what was still owed to the foreclosing lender. For property owners who wished to remain in their homes, Seymour offered other rescue options such as refinancing, reverse mortgages, and “lifetime leases.”
Select homeowners were then told they would have to transfer the Title of Property to an “investor.” Many were asked to sign documents, which later proved to be meaningless. Seymour then substituted these documents with documents granting Power of Attorney from the homeowner to fellow schemer, Jason Passell. The documents investors were seeing were completely different than the ones actually signed by the homeowners.
Seymour sought out individuals with good credit looking to start real estate investing. Seymour told these investors that they were helping the homeowners stay out of foreclosure. Some investors were told they were simply “temporary owners” and the true property owner would buy the property back once Seymour assisted them in fixing their poor credit. Other investors were told the homes would be rehabbed by Seymour’s fake company and would be sold for a profit, which would then be shared between Seymour and the investor.
Investigators believe the alleged criminals obtained nearly $3 million in loans. Lenders were fooled by false documents into believing the purchase price was higher than the actual selling amount. Some homeowners were not even aware they were technically selling their property anyways.
Raymond A. Desautels III, who was also part of the scheme, then performed all real estate closings. The lender wired the money to Desautels, based on the fake closing costs. Desautels then prepared fake documents claiming that the investor was using their own funds in the transaction. This attributed to more confusion and misunderstandings for the lender regarding actual costs and transactions.
The homeowners were never present at closing, though forged documents were signed by the false Power of Attorney make it seem as if they had been. Then Desautels issued a proceeds check made payable to the homeowner. Passell and Seymour then cashed the check for themselves at a local check-cashing establishment in Worcester. Investigators believe Seymour cashed over $1 million in proceeds checks.
Notary Public Judith Piette signed documents four different times saying that the homeowners had appeared personally, though they never did. However, authorities do not believe Piette knew of the larger fraud scheme.
Many of the homeowners involved in this situation have been evicted from their homes after being foreclosed upon and many investors were also unable to make the full mortgage payments, resulting in foreclosure on those properties as well.
Desautels pleaded guilty to five counts of Inducing a Lender to Part with Property on December 1, 2009 and was sentenced to two years in state prison. Piette was seen in court on January 13, 2010 and pled guilty to four counts of False Written Report by a Public Officer. Seymour was due back in court for a status conference last Friday, August 20. Passell is charged with seven counts of Uttering and Forgery. He is due in court on August 30 for a status conference.
Written by Kelly Mellott