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Testimony wraps up in mortgage fraud case

Jurors will hear final arguments today and begin deliberating whether a Manchester man is guilty of orchestrating an elaborate $13 million mortgage fraud scheme or was just the owner of a failed business, as his lawyers contend.

Testimony in the trial of Michael Prieto wrapped up yesterday after seven days. Prieto did not testify.

Defense lawyer Michael Iacopino called only one witness – Ted Perkins – who said he is friends with Prieto and worked with him at the Countrywide mortgage company, where they both were loan officers in 2005 and 2006.

Perkins testified that former loan officer John Duris, who wrote mortgages for more than two dozen of Prieto’s transactions and has pleaded guilty to mail fraud, told Duris several months ago, “If the federal government and the banks say you’re guilty, then you’re guilty.” Perkins said the conversation took place several months ago at a Manchester bar where several of his mortgage company friends were calling the charges against Prieto and Duris “a joke.”

U.S. District Judge Steven McAuliffe told jurors they could use Perkins’s testimony to assess the credibility of Duris’s testimony against Prieto.

Prosecutors said Prieto targeted homeowners on the brink of foreclosure and persuaded them to turn over their deeds to him in exchange for staying in their homes and paying rent. He also offered them the option to buy their homes back in two years. They said he refinanced the homes using fraudulent loan applications and “straw buyers” to mask his involvement, then stripped the equity and pocketed the proceeds before defaulting on the loans.

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