Bruce Lewis, 65, Charged in $33M Mortgage Fraud Scheme

Five defendants, including Bruce Lewis, 65, Jacqueline Graham, 47, Anthony Vigna, 59, Rocco Cermele, 54, and Paula Guadagno, 58, were charged in White Plains federal court with orchestrating a $33 million mortgage fraud conspiracy that preyed on homeowners drowning in debt. The scheme, which operated under the guise of a legitimate debt-relief operation called the Pillow Foundation or Terra Foundation, allegedly used fraudulent filings to falsely claim mortgages had been erased—while leaving victims deeper in financial ruin.

According to the unsealed indictment, Terra Foundation promised struggling homeowners across Westchester and Putnam Counties and in Connecticut that it could eliminate their mortgage debt for a fee. Instead, the defendants filed fake discharge documents at county clerk offices, creating the illusion of relief while the actual mortgage obligations remained. Clients were then charged recurring monthly fees for so-called audits that were never conducted, further bleeding them dry.

Anthony Vigna, a lawyer who worked in-house at Terra, provided legal cover for the operation, while Rocco Cermele, the director of operations, actively recruited clients. Paula Guadagno, a real estate title professional, processed fraudulent title work to support the false claims. All five defendants are charged with conspiracy to commit bank fraud, wire fraud, and mail fraud—crimes that carry decades behind bars if convicted.

Manhattan U.S. Attorney Preet Bharara did not mince words: ‘The defendants allegedly preyed on vulnerable homeowners struggling with their mortgage payments and, with their greed, victimized them further.’ He emphasized that victims were left worse off—still on the hook for their original loans and now burdened with new debt, often from second or reverse mortgages that Terra encouraged them to take out under false pretenses.

FBI Assistant Director-in-Charge William F. Sweeney Jr. condemned the abuse of federally backed housing programs, stating the fraud not only drained victims financially but also undermined the integrity of systems meant to help struggling families. ‘If something doesn’t sound right, trust your instincts,’ Sweeney warned, urging the public to report suspicious mortgage relief offers to the FBI.

HUD-OIG Special Agent-in-Charge Christina Scaringi added that the reverse mortgage program was designed to protect seniors, not enrich fraudsters. ‘The defendants’ alleged scheme to unjustly enrich themselves through the victimization of our senior citizens is a shameful act,’ she said. HUD is urging anyone with information about similar scams to call its hotline immediately. The case continues to unfold in the Southern District of New York.