Attorney Pleads In New London County Mortgage Fraud

A New Haven attorney pleaded guilty today to involvement in a New London mortgage fraud scheme, U.S. Attorney for the District of Connecticut David Fein announced.

David Kinney, 52, who has offices at 685 State Street in New Haven, appeared before Senior United States District Court Judge Alfred V. Covello in Hartford. He pleaded to one count of conspiracy and one count of making a false statement.

According to the press release by Tom Carson of the Public Information Office of the U.S. Attorney District of Connecticut:

According to court documents and statements made in court, in 2006 and 2007, Kinney participated in a mortgage fraud conspiracy by acting as the settlement agent in connection with fraudulent real estate transactions in New London County. As part of the scheme, Kinney submitted, or caused to be submitted, materially false HUD-l settlement statements to lenders. In certain cases, KINNEY released a disbursement check before he had received the down payment listed on the HUD-1.        

On Nov. 5, 2007, in connection with the investigation of this matter, Federal Bureau of Investigation special agents served Kinney a subpoena at his New Haven office. On that date, KINNEY told agents that he had never given anyone a closing check prior to receiving the down payment money in connection with real estate closings that he handled when, in fact, he had done so on multiple occasions.        

Judge Covello has scheduled sentencing for Feb. 22, 2012, at which time each defendant faces a maximum term of imprisonment of 10 years.        

This case is being investigated by the FBI and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Michael S. McGarry and David T. Huang.        

In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an email to ctmortgagefraud@ic.fbi.gov.        

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; FBI; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.        

To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.