U.S. Attorney Carmen M. Ortiz.
A Methuen businesswoman pleaded guilty Tuesday to participating in a conspiracy to defraud banks and mortgage companies by engaging in sham “short” sales of residential properties in the Merrimack Valley, according to the U.S. Attorney’s office, Boston.
Dahianara Moran, 40, pleaded guilty to one count of conspiracy to commit bank fraud. U.S. District Court Judge Rya W. Zobel scheduled sentencing for Feb. 17, 2016. Moran purported to sell two properties she owned to third parties who were, in fact, her close relatives, while actually maintaining control of both properties, officials at U.S. Attorney Carmen M. Ortiz’ office said.
Moran conspired with others—including an unnamed Methuen loan officer and a Haverhill real estate agent—to defraud various banks via bogus short sales of homes in Haverhill, Lawrence and Methuen, a statement said. A short sale is a sale of real estate for less than the value of any mortgage debt on the property. Short sales are an alternative to foreclosure that typically occur only with the consent of the mortgage lender, and that generally result in the lender absorbing a loss on the loan and releasing the borrower from the unpaid balance. By their very nature, short sales are intended to be arms-length transactions in which the buyers and sellers are unrelated, and in which the sellers cede their control of the subject properties in exchange for the short-selling bank’s agreement to release them from their unpaid debt.
Hayacinth Bellerose, a real estate attorney from Dunstable, Mass., pleaded guilty last month to the same charge and is scheduled to be sentenced Feb. 4.
The conspiracy began in approximately August, 2007, and continued through June, 2010, a period that included the height of the financial crisis and its aftermath. Home values in Massachusetts and across the nation declined precipitously, and many homeowners found themselves suddenly “underwater,” with their homes worth less than the mortgage debt they owed. As part of the scheme, Moran and her co-conspirators submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales—and thereby to release the purported sellers from their unpaid mortgage debts—while simultaneously inducing the purported buyers’ banks to provide financing for the deals. In fact, the purported sellers simply stayed in the homes, with their debt substantially reduced. In some cases, the conspirators then re-sold the properties in genuine arms-length transactions for a profit. Meanwhile, the short-selling banks lost millions of dollars.