Mansfield Man Sentenced to Over 11 Years in Jail for Mortgage Fraud Scheme

Editor’s Note: Information in this article was provided by the U.S. Attorney’s office.

A Mansfield resident and former real estate developer will spend over 11 years in jail for a multi-year, multi-property mortgage fraud scheme in Boston.

Thursday, Michael David Scott, 51, was sentenced by U.S. District Court Judge Richard G. Stearns to 135 months in prison, five years of supervised release. He was also ordered to pay restitution of over $11,374,201 and to forfeit $7,413,712, according to the U.S. Attorney’s office.

In June 2015, Scott pleaded guilty to counts of 32 counts of wire fraud, 14 counts of bank fraud, and 22 counts of money laundering.

From September 2006 to April 2008, Scott arranged to purchase multi-family residences and then sold individual condominium units in the buildings to straw buyers recruited by him and his co-conspirators, Jerold Fowler and Thursa Raetz. Scott and his co-conspirators fraudulently recruited straw buyers to purchase condominium units in Roxbury and Dorchester with promises that the buyers would not have to make down payments, pay any funds at the closing, or be responsible for mortgage payments, but would share in profits when the units were resold.

In order to obtain mortgage loans in the names of the straw buyers, Scott submitted mortgage loan applications that falsely represented key information, such as the buyers’ income, personal assets, down payment, and intention to reside in the condominiums. The mortgage lenders (nine national mortgage companies and one local bank) were led to believe that the straw buyers had made substantial down payments and paid substantial sums at closings.

Fowler, 31, and Raetz, 40, both of Norfolk, Va., pleaded guilty to two counts of wire fraud in June 2015 and are scheduled to be sentenced on Nov. 20 and Nov. 19, 2015.