Sentencing In $140 Million CU National Mortgage Fraud Delayed Again

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NEWARK, N.J. – Michael McGrath, one-time CEO of U.S. Mortgage/CU National Mortgage convicted of stealing almost $140 million of credit union funds, will remain free on bail as his July 27 sentencing was postponed again until Nov. 15.

Sentencing for McGrath, who is expected to receive up to 20 years behind bars, has been delayed at least six times since he pleaded guilty in June 2009 to charges related to the massive fraud. The latest delay was requested by the U.S. Attorney’s office because of a scheduling conflict.

McGrath confessed to a scheme by which he sold the mortgages of credit unions he was servicing to Fannie Mae then kept the proceeds, about $138 million of it belonging to his credit union customers.

Prosecutors in the case continue to come up empty-handed in their search for any additional McGrath assets for the restitution to the credit union victims. Under his plea deal McGrath agreed to forfeit about $13 million in assets. That means 28 credit unions are still out about $125 million.

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