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A New Haven attorney pleaded guilty Thursday in connection with a mortgage fraud conspiracy in New London County.
David Kinney, 52, pled to one count of conspiracy and one count of making a false statement. As part of the scheme, Kinney submitted, or caused to be submitted, materially false HUD-l settlement statements to lenders, according to a press release from David B. Fein, U.S. Attorney for the District of Connecticut. In certain cases, Kinney released a disbursement check before he had received the down payment listed on the HUD-1, Fein said.
In 2007, FBI special agents served Kinney a subpoena at his New Haven office. Kinney told agents that he had never given anyone a closing check prior to receiving the down payment money in connection with real estate closings that he handled when, in fact, he had done so on multiple occasions.
Judge Alfred V. Covello has scheduled sentencing for Feb. 22, at which time each defendant faces a maximum term of imprisonment of 10 years.
The case is being investigated by the FBI and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Michael S. McGarry and David T. Huang.
The investigation uncovered two mortgage fraud cases.
Prosecutors charge that former loan officer Jose Guzman of Waterford, who admitted to conspiracy charges in September 2008, spearheaded one of the mortgage frauds. Twenty-eight-year-old Syed "Ali" Babar of New London, charged with mortgage-fraud conspiracy, led the other scam, according to prosecutors.