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Feds charge man with 62 counts of fraud, money laundering for alleged role in condo-flipping scheme

Michael David Scott, who bought and sold condos in Dorchester and Roxbury, was indicted today on charges he defrauded mortgage lenders by arranging the sale of condos to "straw buyers" who had no intentions of living in the units. According to the US Attorney's office in Boston:

Scott and his associates bought multi-family dwellings promising to convert them into condominiums, and then resold the individual units to various straw buyers. Scott arranged for the buyers to obtain mortgage financing by falsifying key information, such as the buyers' income, assets, downpayment and residence. In most instances the buyers obtained residential mortgage loans for properties that they never intended to live in. While the lenders (mortgage companies and one bank) were led to believe they were lending to residential purchasers, Scott recruited buyers by representing the purchases to them as a no-money-down "investment" opportunity. The "investors" were assured that they would not have to make any down payments, pay any closing costs, or pay expenses relating to the maintenance of the units, but would share in profits when the units were sold.

Scott, a 44-year-old Mansfield resident, was indicted on 28 counts of wire fraud, 12 counts of bank fraud and 22 counts of money laundering.

The indictment against him alleges he used 30 different straw buyers to apply for mortgages. The indictment charges Scott would buy multi-family buildings, convert them into condos, then arrange financing for the straw buyers - who would then re-sell the units - at prices that were falsely inflated on mortgage documents.

The indictment against Scott.

Boston Globe, 12/13/09: Developer’s easy-money pitch left a trail of ruin.

Innocent, etc.

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Comments

I thought he lived somewhere in PA.

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But that's Michael Gary Scott.

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Why Feds and why 62 counts? Not saying he isn't guilty but with Feds you never know- they send you to jail just for "lying to investigators" not even under oath. I take ever Fed case with a heavy grain salt.

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If you look at the indictment, most of the banks are out of state, which lets the FBI get involved.

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Makes sense.

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