Philadelphia Foreclosure Rescue Scammers Sentenced to Serve Time in Prison

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PHILADELPHIA—Anthony J. DeMarco III, 33,of Conshohocken, Pennsylvania, was sentenced today to serve 25 years in prisonfor conspiracy and fraud charges in connection with a mortgage fraud schemeinvolving more than $30 million in loans. Between 2006 and 2009, DeMarco ownedand operated DeMarco REI Inc., a foreclosure rescue company. In addition toDeMarco, three others charged in the conspiracy pleaded guilty and were alsosentenced today. Michael Richard Roberts, 30, of Swedesboro, New Jersey, wassentenced to 10 years in prison; Sean Ryan McBride, 38, of Pittsburgh, wassentenced to 63 months in prison; and Eric Bascove, 39, of Blue Bell,Pennsylvania, was sentenced to 41 months in prison. DeMarco pleaded guiltyMarch 20, 2012, to a 15-count indictment charging conspiracy, mail fraud, wirefraud, bank fraud, and money laundering. U.S. District Court Judge Michael M.Baylson presided over the sentencing hearings. Fines and restitution arepending.
DeMarco REI was headquartered inPhiladelphia and employed Roberts and Bascove, among others. Roberts was thevice president of sales. DeMarco’s business claimed to be able to assisthomeowners facing imminent foreclosure. Between June and December 2008, thedefendants would scour public records filings to find homeowners in financialdistress and pitch a “sale-leaseback” arrangement to them. The pitch was thatDeMarco REI would buy the homeowner’s house, the homeowner would remain in thehouse and pay rent to DeMarco REI, and when the homeowner got back on his orher feet financially, the homeowner could buy back the house. The defendantssolicited straw buyers for properties, used fraudulent documents to obtainmortgage loans from lenders, stole the sellers’ equity in the homes at closing,and eventually failed to make the monthly mortgage payments. DeMarco used thesellers’ equity to run his company and to pay lavish personal expenses. Thehouses went into foreclosure with the straw buyers listed on the mortgage, theoriginal homeowners facing eviction from their homes, and the mortgage lendersstuck with loans in default. Only one couple ever acquired the means torepurchase their home, but after they wired approximately $245,000 to DeMarcoat his direction and for that purpose, DeMarco instead used their money topurchase a Ferrari for himself and jewelry for his girlfriend and to paymiscellaneous expenses.
McBride was a title agent and chieffinancial officer at Settlement Engine Inc. in Pittsburgh. Settlement Engineclosed approximately 30 loans for DeMarco REI from June 2008 to early December2008. McBride pleaded guilty to conspiracy, wire fraud, and bank fraud; Robertspleaded guilty to conspiracy, wire fraud, and bank fraud; Bascove pleadedguilty to conspiracy and bank fraud.
At the time of indictment, the U.S.Attorney’s Office for the Eastern District of Pennsylvania’s Civil Divisionfiled a verified complaint and temporary restraining order to help the originalhomeowners save their homes. The complaint and temporary restraining ordersought novel relief that would bring all the individuals and entities that havea stake in the homes before the court in an orderly process by which the damagecaused by the defendants’ alleged fraud could be mitigated. In 2011, U.S.District Court Judge Michael Baylson approved conversion of the temporaryrestraining order into an injunction that stopped foreclosures and evictionsthat were related to the alleged fraud and that set forth the details of themediation process. Currently, the majority of the banks and the originalhomeowners are still in the process of attempting to reach resolutions.
The case was investigated by thePennsylvania Department of Banking, the FBI, and the U.S. Postal InspectionService. The criminal case is being prosecuted by Assistant U.S. Attorney KarenL. Grigsby. The civil case is being handled by Assistant U.S. Attorney StaceyL. B. Smith.
Today’s announcement is part of effortsunderway by President Obama’s Financial Fraud Enforcement Task Force (FFETF)which was created in November 2009 to wage an aggressive, coordinated, andproactive effort to investigate and prosecute financial crimes. With more than20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, itis the broadest coalition of law enforcement, investigatory, and regulatoryagencies ever assembled to combat fraud. Since its formation, the task forcehas made great strides in facilitating increased investigation and prosecutionof financial crimes; enhancing coordination and cooperation among federal,state, and local authorities; addressing discrimination in the lending andfinancial markets and conducting outreach to the public, victims, financialinstitutions, and other organizations. Over the past three fiscal years, theJustice Department has filed more than 10,000 financial fraud cases againstnearly 15,000 defendants including more than 2,700 mortgage fraud defendants.For more information on the task force, visit www.stopfraud.gov.