Opinion ID: 866146
Heading Depth: 2
Heading Rank: 1

Heading: The Mortgage Fraud Scheme

Text: The companion case to this appeal, United States v. Appolon, 695 F.3d 44, 51-53 (1st Cir. 2012) [Daniel Appolon], lays forth the basic facts of the mortgage fraud scheme at issue in great detail, and we assume the reader's familiarity with that opinion.2 As we described, [t]he scheme itself was uncomplicated: appellants and their coconspirators arranged 1 A number of the conspirators in this scheme are related and therefore share the same surname. For clarity's sake, we refer to the Appolons by their first names throughout the opinion. 2 Ralph's case was originally joined to that of his codefendants, but he was tried separately after his attorney withdrew shortly before the joint trial. Daniel Appolon, 695 F.3d at 52 n.1. -2- for straw buyers to purchase real property at the asking price, falsified mortgage loan applications for the straw buyers to obtain financing for an artificially-inflated purchase price, and pocketed the difference. The loans secured by each of the properties involved in appellants' scheme eventually went into default, and most of the properties were forced into foreclosure at huge losses for the lenders. Id. at 51. Twenty-one properties were sold as part of this scheme. Id. at 53. The conspiracy involved a number of individuals, including: Eric Levine, a real estate lawyer who had been suspended from the practice of law; Daniel Lindley, another real estate attorney; Latoya Haltiwanger, a residential mortgage broker; and Ernst Appolon, a realtor. Id. at 52. Ernst Appolon's brothers, Daniel and Ralph, also participated in the scheme. Id. The trial record discloses the following facts, described in the light most favorable to the jury's verdict. See United States v. Mubayyid, 658 F.3d 35, 41 (1st Cir. 2011). Ralph was a loan originator with New England Merchants, a real estate company where he worked with Ernst and Daniel. His main responsibility was to recruit and cultivate straw buyers to participate in the fraudulent property deals. These buyers typically provided their names and credit histories for the purchase in exchange for various benefits, including having mortgage payments made on their behalf or receiving remuneration for their participation. Ralph also created and processed loan applications for the property deals, -3- which contained various representations regarding the straw buyers who were purportedly applying for the loans. Ralph's wire fraud charges arose from his involvement with transactions surrounding two properties located at 586 East Third Street, South Boston, MA (the Third Street property) and 3231 Washington Street, Jamaica Plain, MA (the Washington Street property).