An Edgewater man was sentenced to six years in prison and a Crofton man pleaded guilty Friday for their involvement in a Gambrills-based mortgage fraud scheme in which they stole nearly $5 million for their personal use, prosecutors said.
Gary Pierce, 44, was sentenced Friday to six years in prison for his part in a wire fraud conspiracy to divert funds that were supposed to be used to pay off mortgages during home transfers on 17 Maryland properties, according to a statement from Maryland's U.S. Attorney's Office.
Todd R. Bettin, 42, pleaded guilty Friday to the same wire fraud scheme, the statement said.
Through Pierce's companies, At Home Settlements and At Home Mortgage, where Bettin worked, the two men "diverted mortgage payoff funds from clients' closings," according to prosecutors.
Beginning five years ago, Pierce and Bettin used fraudulent forms and reports to make it appear that mortgages had been paid off but actually kept funds totally $4,971,380 for themselves, the statement said.
In order to prevent lenders from discovering their scheme, in addition to creating fraudulent paperwork to assert the homes' transfer, Bettin continued to make monthly payments on the mortgages that the parties to the home sale assumed had been paid in full.
Since the existing mortgages were not paid off, liens against the properties were intact and the title could not actually be passed to new lenders and borrowers, according to the U.S. attorney.
Also in 2007, Bettin, with Pierce as his settlement agent, refinanced his home loan but did not pay off the original mortgage, keeping the payoff amount. Pierce that year took out a mortgage on a property in Edgewater that he did not own by creating false documents with Bettin in order to sustain their scheme.
Bettin could be sentenced to as many as 20 years in prison, the statement said.