James Bayfield, Mortgage Fraud, New York 2017

A multi-million dollar mortgage fraud scheme has finally come to an end in the court of a Brooklyn federal judge.

James Bayfield, a 46-year-old Queens man, was sentenced to 21 months in prison, to be followed by three years of supervised release, for his role in a multi-million dollar mortgage fraud scheme. Bayfield, a self-described mortgage specialist, was convicted by a federal jury in January 2017.

Sentencing occurred earlier today in federal court in Brooklyn, where Bayfield was ordered to pay $184,651 in forfeiture. Bayfield and his co-conspirators caused mortgage loan applications with false information to be submitted to lending institutions, including Amtrust, Bank of America, and JPMorgan Chase, in connection with the purchase of residential properties located in Brooklyn and Queens.

The applications contained fraudulently inflated purchase prices and false information about the assets and income of the purported purchasers, many of whom were paid to act as straw purchasers. Bayfield and his co-conspirators also provided false down payment checks to make it appear as if the straw purchasers and other borrowers had made down payments on the properties.

“Bayfield has portrayed himself as a mortgage specialist, but now stands exposed as a convicted thief who used his knowledge of real estate transactions to carry out his fraudulent schemes against lending institutions,” stated Richard P. Donoghue, United States Attorney for the Eastern District of New York.

The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys David C. Pitluck, Mark E. Bini, and Michael T. Keilty are in charge of the prosecution.

“This Office will continue working with our law enforcement partners to vigorously prosecute those who commit mortgage fraud and enrich themselves at the expense of lenders left holding the loans,” Donoghue added.

The investigation and prosecution of Bayfield’s scheme involved the Federal Bureau of Investigation, the Federal Housing Finance Agency, Office of Inspector General, the U.S. Department of Housing and Urban Development, Office of Inspector General, the Federal Deposit Insurance Corporation, Office of Inspector General, and the New York State Department of Financial Services.

Between September 2008 and May 2011, Bayfield and his co-conspirators conducted simultaneous and secretive purchases and sales of the properties, sometimes called “flips,” at inflated prices. Ultimately, the lending institutions issued millions of dollars of mortgage loans secured by properties with inflated appraisal values, and many of these loans were placed into default status.

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