Michael David Scott, Mortgage Wire Fraud, Massachusetts 2024

Former Real Estate Developer Sentenced to Prison for Mortgage Fraud Scheme

BOSTON – A former real estate developer, Michael David Scott, was sentenced to 135 months in prison on Thursday in connection with a multi-year, multi-property mortgage fraud scheme in Boston.

Scott, 51, of Mansfield, was found guilty of 32 counts of wire fraud, 14 counts of bank fraud, and 22 counts of money laundering after he pleaded guilty to the charges in June 2015.

According to investigators, Scott, a former realtor and developer, arranged to purchase multi-family residences and then sold individual condominium units in the buildings to straw buyers recruited by him and his co-conspirators, Jerold Fowler and Thursa Raetz.

The scheme, which took place from September 2006 to April 2008, involved Scott and his co-conspirators recruiting straw buyers to purchase condominium units in Roxbury and Dorchester with promises that the buyers would not have to make down payments, pay any funds at the closing, or be responsible for mortgage payments, but would share in profits when the units were resold.

Scott submitted mortgage loan applications that falsely represented key information, such as the buyers’ income, personal assets, down payment, and intention to reside in the condominiums, in order to obtain mortgage loans in the names of the straw buyers.

The mortgage lenders, nine national mortgage companies and one local bank, were led to believe that the straw buyers had made substantial down payments and paid substantial sums at closings.

Scott was ordered to pay restitution of over $11,374,201 and to forfeit $7,413,712. Fowler and Raetz, both of Norfolk, Va., pleaded guilty to two counts of wire fraud in June 2015 and are scheduled to be sentenced on November 20 and November 19, 2015, respectively.

United States Attorney Carmen M. Ortiz, Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement.

The case is being prosecuted by Assistant U.S. Attorneys Victor A. Wild of Ortiz’s Economic Crimes Unit and Ryan M. DiSantis of Ortiz’s Public Corruption Unit.

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