Sheldon Haag, Wire Fraud, Massachusetts 2024

A Boston federal court has convicted a real estate agent of a multi-year scheme to defraud his clients by engaging in fraudulent short sales of government and bank-owned properties.

Sheldon Haag, a 34-year-old real estate agent from Glastonbury, Conn., was sentenced to one year and one day in prison and two years of supervised release for his role in the scheme. He was also ordered to forfeit $277,331 and to pay restitution in an amount to be determined at a later date.

According to court documents, Haag and another real estate agent, James Macchio, used straw buyers to acquire properties owned by the clients of a brokerage where they worked. The properties included banks, federal agencies, bankruptcy trustees, and other mortgage holders.

The straw buyers included a shell company set up by a co-conspirator as a purported construction company. Haag and his co-conspirators hid their involvement as the de facto buyers of short sale properties from their clients, the owners of the properties, and used their inside knowledge as the owner’s broker to minimize sale prices in order to maximize their gain from later ‘flipping’ the properties.

While perpetrating the ‘flipping scheme,’ Haag and his co-conspirators further defrauded clients by submitting fraudulent renovation bids from contractors to their own clients, including from the fake construction company they controlled through a co-conspirator. Once their clients accepted a fraudulent bid, Haag and his co-conspirators would hire different contractors at much lower cost and pocket the difference between the fraudulent bid and the actual cost of property repairs.

Haag pleaded guilty to one count of conspiracy to commit wire fraud in June 2023. His co-conspirator, James Macchio, pleaded guilty in May 2024 and is scheduled to be sentenced on Nov. 19, 2024.

The investigation was conducted by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, and the U.S. Department of Veterans Affairs, Office of Inspector General. The United States Department of Housing and Urban Development provided valuable assistance in the case.

Assistant U.S. Attorney Kriss Basil prosecuted the case.

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