Saturday, February 20, 2010

White Collar: New York Attorney Indicted for Mortgage Fraud and Money Laundering

A federal grand jury in the Southern District of New York has returned an indictment against Louis Cherico, an attorney practicing in New York City and its suburbs. The indictment charges Cherico with operating a scheme to obtain control of luxury properties by filing false information with banks in obtaining mortgages. Specifically, the indictment alleges that in filings to lenders Cherico valued the properties in excess of 100% of their true market value.

According to the indictment, between July and December 2002, Cherico and his co-conspirators allegedly accomplished the fraud by filing false and misleading information with the lenders. Among the false documents allegedly filed were the following: loan applications, contracts for sale, deeds, and title reports. The false and misleading information in these and other documents included the following: income, assets, debts and credit worthiness of the purported lender; the chain of title; price; and the purported borrower's intent to reside in the premises. Through the scheme the co-conspirators were able to gain control of millions of dollars worth of property that they would otherwise have been unable to afford.

The indictment also charges Cherico with money laundering and obstruction of justice. These charges revolve around Cherico's relationship with Dominick DeVito. The government alleges that Cherico deposited the proceeds of the fraud into a bank account that he controlled and then transferred funds to an account controlled by DeVito, a co-conspirator. The government contends that the purpose of the transfer to DeVito's account was to conceal the fraudulent source of the funds. The obstruction charge stems from DeVito's 2003 conviction for racketeering and mortgage fraud. It is alleged that Cherico helped DeVito hide profits from a similar mortgage fraud and filed a false affidavit with the U.S Probation Office on DeVito's behalf.

For more about the case please see American Chronicle, "New York Lawyer Indicted on Mortgage Fraud, Money Laundering, Other Charges," February 19, 2010,

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