A former mortgage banker and a Boston politician were sentenced to prison last week after being convicted of conspiracy to defraud four mortgage lenders in the Boston area.
Edward Macarelli, a former loan originator for John Hancock Mortgage Corp., and Joseph L. Timilty, a three-time Boston mayoral candidate, will serve six months in prison for their part in a scheme to fraudulently obtain loans for individuals buying units in an East Boston, Mass., condominium, according to an indictment.
Mr. Macarelli and Mr. Timilty conspired to sell apartments in a condominium developed by Mr. Timilty and then fraudulently obtain financing for the purchasers, the indictment said.
False Down Payment Data
The men falsely informed mortgage companies that the buyers had made large cash down payments. In fact, the down payments, which ranged between $37,000 and $61,000, were either financed by second mortgages granted by the sellers but not disclosed to the mortgage companies, or not made at all.
In addition, the co-conspirators aided buyers in making fraudulent mortgage applications for buyers of the condominiums, enabling them to obtain mortgages for which they were not qualified.
They worked the scam on 30 condominium purchases, authorities said.
The lenders defrauded by the scheme were Boston-area offices of Citicorp Mortgage, John Hancock Home Mortgage, and Prudential Home Mortgage Co., as well as Seacoast Mortgage Corp. of Cranston R.I.