New Orleans man Patrick Healey, 34, has been sentenced for his role in a multi-year scheme to defraud the Federal Housing Administration by falsifying loan applications. The crime, which unfolded between October 2008 and May 2009, targeted low-income borrowers who otherwise wouldn’t have qualified for federally insured loans.
Healey, a former employee of ABC Homes, LLC in St. Bernard Parish, conspired with co-defendants Jared Castellaw and Valerie Schones to submit false documentation to the FHA. These fabricated records inflated borrower incomes and misrepresented financial standing, enabling unqualified applicants to secure mortgage financing backed by U.S. taxpayers.
The fraud succeeded long enough to trigger losses exceeding $852,415, all borne by the FHA. Investigators uncovered a coordinated effort to exploit the system, leveraging insider access and detailed knowledge of underwriting loopholes to manipulate the approval process.
On May 1, 2019, Healey was sentenced to time served and handed five years of supervised release. He was also ordered to pay full restitution—$852,415—and assessed a $100 special penalty. The financial judgment looms large, though collection remains a challenge given the defendant’s history of financial misconduct.
The U.S. Attorney’s Office, led by Peter G. Strasser, prosecuted the case with support from the Department of Housing and Urban Development’s Office of Inspector General and the FBI. Assistant U.S. Attorneys Sharan E. Lieberman and Edward J. Rivera handled the case, calling it a betrayal of public trust and a direct hit on affordable housing programs.
This case underscores the vulnerabilities in federal housing programs and the lasting fallout when insiders exploit them. While Healey avoids additional jail time, the restitution order and supervision signal federal resolve to hold financial fraudsters accountable—even years after the scheme collapses.
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Key Facts
- State: Louisiana
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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