A Man from West Islip Is Being Charged For Cheating Foreclosure Victims of $2.5 Million

The district attorney’s court at Suffolk is charging a man from West Islip for cheating foreclosure victims of $2.5 million. Thomas Spota the District Attorney said, “What we’re seeing in Suffolk County is an explosion of fraud involving, depending on the scheme, every facet of the mortgage process.” The probe has caused 27 arrests and 9 indictments to be made since June this year.

The latest case centres on Louis LaDonna aged 39 who has pleaded not guilty to 13 counts including grand larceny. LaDonna has been accused of inflating house values in West Islip, Lindenhurst and Babylon. He has been operating through his firm LaDonna Properties. His attorney William Keahon contended that the case was not strong as it was based on the documents given to him by the District Attorney’s office. He is sure that it will not be possible for the latter to prove their points of accusation.

It has been alleged that from 2006 to 2007, LaDonna made contacts with foreclosure victims and found them “straw buyers”. The latter are bogus and pretend to purchase the house, said the prosecutors. For this these fictitious buyers are paid something ranging from $10,000 to $20,000 for their acting. LaDonna was also in cahoots with appraisers to inflate the value of all the units to something much above its real worth. Thomas Spota revealed these facts at a press conference.

By producing faked documents that over stated their earnings and assets these phony purchasers qualified for mortgages that did not require down payments. After completion of the transactions the lenders (Mortgage-It and First Franklin Financial Corp) made the requisite payment to LaDonna for the properties. The lenders were given only two or three mortgage payments causing them to proceed with foreclosure.

LaDonna has been released on a bail worth $750,000. He will have to reappear in court on 4th February 2009.

Recently Maire Poulard, aged 50 of East Quogue as well as 49-year-old Frank Spindel of Miller Place have been arrested on charges of larceny. Spindel was the mortgage broker of Poulard and helped her set up a straw buyer to buy a house of her choice priced at $1.2 million. Brokers are being accused of “making this thing work at any cost”, said Maureen McCormack of the economic crime bureau in the office of the District Attorney.