COLUMBUS, Ohio -- Michael McAuley, 40, of Columbus pleaded guilty to a Bill of Information charging him with one count of conspiracy to commit money laundering relative to his role in a mortgage fraud scheme. McAuley faces a maximum prison sentence of 20 years, a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater, and restitution.
According to court documents, in 2003 McAuley became employed as a loan officer at Sunrise Mortgage. As a loan officer, McAuley obtained prospective borrower’s identifying information, including income, employment, and liability information, and prepared loan applications to submit to lenders and financial institutions in order to secure financing. Between November 2005 and December 2006 McAuley conspired with Andrew Pfeifer to engage in a mortgage fraud scheme whereby Pfeifer would purchase homes in need of substantial repair for a very little amount and would then sell them with little or no renovations performed for a falsely inflated amount to unsuspecting buyers.
In order for the buyers to qualify for financing, who would not have otherwise qualified, Pfeifer enlisted the help of McAuley to prepare false loan applications. The false loan applications included fictitious income, employment, and liability figures that were submitted to various lenders and financial institutions. McAuley agreed to falsify loan applications for Pfeifer in order for Pfeifer to purchase properties to rent to others.
By falsifying the loan applications on seven real estate transactions, McAuley and Pfeifer caused lending institutions to wire transfer $663,085.47 to the various title companies, thus constituting wire fraud. With McAuley’s assistance, Pfeifer laundered $85,431 in proceeds derived from his illegal mortgage fraud scheme by depositing these funds into his various bank accounts.
In June 2009, Pfeifer, of Mansfield, Ohio, was sentenced to 36 months in prison, three years of supervised release, and ordered to pay restitution in the amount of $760,129 to the victims in this case, and $40,430 to the Internal Revenue Service (IRS). In May 2008, Pfeifer pleaded guilty to one count each of filing a false federal income tax return with the IRS, wire fraud, bank fraud, and money laundering.
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