A federal judge today sentenced Michael David Scott, 51, of Mansfield, to 135 months in federal prison for his role in defrauding banks in a condo-flipping scheme as the local housing market went into decline.
In addition to his time behind bars, Scott was also ordered to repay $11.4 million in fraudulent payments and fork over another $7.4 million, the US Attorney's office reports.
In June, Scott pleaded guilty to 32 counts of wire fraud, 14 counts of bank fraud and 22 counts of money laundering. Scott had been indicted in 2010.
A number of other brokers and lawyers associated with Scott have already been sentenced.
From September 2006 to April 2008, Scott, a former realtor and developer, arranged to purchase multi-family residences and then sold individual condominium units in the buildings to straw buyers recruited by him and his co-conspirators, Jerold Fowler and Thursa Raetz. Scott and his co-conspirators fraudulently recruited straw buyers to purchase condominium units in Roxbury and Dorchester with promises that the buyers would not have to make down payments, pay any funds at the closing, or be responsible for mortgage payments, but would share in profits when the units were resold. In order to obtain mortgage loans in the names of the straw buyers, Scott submitted mortgage loan applications that falsely represented key information, such as the buyers’ income, personal assets, down payment, and intention to reside in the condominiums. The mortgage lenders (nine national mortgage companies and one local bank) were led to believe that the straw buyers had made substantial down payments and paid substantial sums at closings.