MICHAEL J. GARCIA, the United States Attorney for the
Southern District of New York, and MARK J. MERSHON, Assistant
Director-in-Charge of the New York Office of the Federal Bureau
of Investigation (“FBI”), announced today the filing of a
superseding Indictment charging DOMINICK DEVITO and ROBERT
DIDONATO with participating in a wide-ranging scheme to commit
mortgage fraud, and DOMINICK DEVITO, ROBERT DIDONATO, JOHN
LISCIO, and LOUIS CORDASCO, JR. with participating in an
associated insurance fraud scheme. DEVITO is also charged with
obstruction of justice. According to the superseding Indictment
filed in Manhattan federal court:
From January 2002 through November 2004, DEVITO was the
leader of a fraudulent real estate investment scheme, which had
as its primary objective the purchase of multimillion-dollar
residential properties in various communities in Westchester
County — including Purchase, New York — with loans obtained
through the submission of false and misleading information to
banks and other lenders. Many of the loans were for amounts
equal to or more than one hundred percent of the property’s
actual sale price, so that the defendants and their coconspirators
did not have to put any of their own money at risk
in the transaction.
DEVITO identified properties for sale, orchestrated the
purchase of the properties and performed construction work at the
properties. DIDONATO was a residential real estate broker for
DEVITO and other co-conspirators in their purchase of the
properties which were the subject of the scheme.
In furtherance of the fraud, the defendants submitted
to various federally-insured banks loan applications, contracts
of sale, deeds, real estate transfer documents, title reports,
and other documents which contained materially false or
misleading information about the income, assets, existing debt
and credit-worthiness of the borrower, the chain of title to the
property, and the sale price of the home. They also indicated
the borrower’s intent to reside in the property as a primary
residence, when the properties were typically purchased for
investment purposes.
DEVITO and DIDONATO “cashed out” on certain properties
by taking additional private loans against the already
fraudulently-inflated sale price of the properties. The proceeds
of these loans, which were never repaid in full, were deposited
in a bank account used for the benefit of DEVITO.
As a result of the defendants’ scheme to defraud,
DEVITO and DIDONATO obtained millions of dollars in loan
proceeds, enabling them to control certain properties that they
otherwise would not have been able to purchase and finance. In
addition, the defendants earned money from fees and commissions
on the sale or re-financing of the properties. The banks, on the
other hand, lost millions of dollars when the defendants and
their co-conspirators defaulted on mortgage payments and caused
several of the properties to go into foreclosure.
In addition, from January 2003 through February 2005,
DOMINICK DEVITO, ROBERT DIDONATO, JOHN LISCIO, and LOUIS
CORDASCO, JR., engaged in a scheme to defraud insurance companies
by submitting false and misleading insurance claims and
supporting documents for water damage caused by broken pipes at
several of the homes purchased as part of the mortgage fraud
scheme.
JOHN LISCIO was a licensed insurance agent who sold
insurance policies to the owners of the homes purchased in the
scheme and helped DEVITO submit insurance claims for water
damage. LOUIS CORDASCO, JR., working for a company that
specializes in emergency clean-up services for water damage to
residential homes, was responsible for performing emergency
clean-up services for some of the homes that were damaged as part
of the insurance fraud scheme. In February 2005, CORDASCO and
LISCIO also planned to break pipes at a home in Purchase, New
York in order to submit a false insurance claim for water damage.
The Indictment also charges DOMINICK DEVITO with
obstruction of justice in connection with a 2003 proceeding in
Manhattan federal court. Specifically, DEVITO submitted false
and misleading information regarding the value of his assets and
his personal net worth following his sale of a property in
Purchase, New York.
If convicted, the defendants face the maximum
penalties, per count, as follows:
Count Charge Defendant Maximum Penalty
1 Conspiracy to commit
bank fraud
DEVITO
DIDONATO
30 yrs prison; 3
yrs supervised
release; $1
million fine, or
twice the
pecuniary loss or
gain from the
offense
2, 3 Bank fraud DEVITO 30 yrs prison; 3
yrs supervised
release; $1
million fine, or
twice the
pecuniary loss or
gain from the
offense
4, 5,
6
Bank fraud DEVITO
DIDONATO
30 yrs prison; 3
yrs supervised
release; $1
million fine, or
twice the
pecuniary loss or
gain from the
offense
7 Bank fraud DIDONATO 30 yrs prison; 3
yrs supervised
release; $1
million fine, or
twice the
pecuniary loss or
gain from the
offense
8, 9,
10, 11
Bank fraud DEVITO 30 yrs prison; 3
yrs supervised
release; $1
million fine, or
twice the
pecuniary loss or
gain from the
offense
12 Bank fraud DEVITO
DIDONATO
30 yrs prison; 3
yrs supervised
release; $1
million fine, or
twice the
pecuniary loss or
gain from the
offense
13 Obstruction of justice DEVITO 10 yrs prison; 3
yrs supervised
release; $250,000
fine, or twice
the pecuniary
loss or gain from
the offense
14 Conspiracy to commit
mail fraud
DEVITO
DIDONATO
LISCIO
CORDASCO
20 yrs in prison;
3 yrs supervised
release; $250,000
fine, or twice
the pecuniary
loss or gain from
the offense
15 Mail fraud DEVITO
DIDONATO LISCIO CORDASCO
20 yrs in prison;
3 yrs supervised
release; $250,000
fine, or twice
the pecuniary
loss or gain from
the offense
DEVITO, DIDONATO, LISCIO, and CORDASCO are expected to
be arraigned before United States District Court Judge BARBARA S.
JONES on the charges in the superseding Indictment on May 5,
2008.
Mr. GARCIA praised the work of the FBI in the
investigation of this case.
Assistant United States Attorneys KATHERINE R.
GOLDSTEIN and JONATHAN B. NEW are in charge of the prosecution.
The charges contained in the Indictment are merely
accusations, and the defendants are presumed innocent unless and
until proven guilty.
08-103 ###
