The architect of a protracted loan-modification scheme was sentenced Tuesday to 15 years in prison and ordered to forfeit $2.5 million, according to federal officials.
David Gotterup of Oceanside, N.Y., on Long Island, was hit with the punishments after pleading guilty in June to ripping off distressed homeowners and committing wire, mail and bank fraud in the process, the Office of the Special Inspector General for the Troubled Asset Relief Program said in a news release.
Gotterup has been in jail since October 2015 after he and associates were accused of operating an elaborate scheme from 2008 to 2012 that misled more than 1,000 homeowners. Mortgage borrowers seeking relief through government modification programs were told to pay “thousands of dollars each in advance” to companies owned or controlled by Gotterup, including Express Modifications, True Credit Empire and The Green Law Group, the Tarp inspector general’s release said.
Telemarketers and sales representatives lied to the homeowners, telling them they were preapproved for loan mods and would receive an attorney’s help in completing their mortgage relief applications and negotiating with lenders, the release said.
“Contrary to these representations, Gotterup and his co-conspirators did little or no work in connection with these fraudulently induced advanced fees,” the release said.
Restitution will be determined at a later date, the release said. The prosecution took place in U.S. District Court in Brooklyn.