Central Islip - (WALK) The chief executive of a Long Island mortgage bank is accused in connection with a $30 million scheme to defraud lenders and then resell "toxic" mortgages to investors, according to federal prosecutors.
Aaron Wider, of HTFC Corporation in Garden City was arrested by the FBI Monday and charged with conspiracy to commit bank fraud involving mortgages. He pleaded not guilty at his arraignment in federal court in Central Islip Tuesday.
Wider, 50, of Copiague, and five other defendants: Manjeet Bawa, 46, of Dix Hills; Joseph Mirando, 54, of Centereach; Joseph Ferrara, 70, of Long Beach; Eric Finger, 48, of Miami, Florida; and John Petiton, 68, of Garden City, each face up to 30 years in prison if convicted. Another suspect has agreed to surrender to authorities Wednesday, said prosecutors.
The suspects are accused of purchasing homes for market value, then over-valuing the properties through bogus appraisals. Based on those appraisals they obtained money to purchase the homes, pay off the owners, and pocket the profit. Then they would sell the mortgages to banks and other investors at the false, inflated value. A practice to become famous as "toxic" mortgage sales.
"Instead of using their skills in banking, the law and investing to assist individuals pursuing the American dream, the defendants cooked-up a sophisticated scheme that defrauded lenders and then fed toxic debt to the investing public," said Eastern District U.S. Attorney Loretta Lynch in a statement.
The 19 homes involved in the scheme were located in Amityville, Baldwin Bellmore, Copiague, Dix Hills, Freeport, Massapequa, North Massapequa and Wantagh. Each ended up in foreclosure. The suspects allegedly ran the scheme between 2003 and 2008, the peak years of the recent real estate bubble, said prosecutors.
Photo: MikeIshere 701