Rancho Mirage Man Gets 51 Months in Prison For $5.3 Million Mortgage Fraud

Steven Pitchersky, 65, pleaded guilty to a federal wire fraud charge last September for his involvement in a scheme to defraud Detroit-based Ally Bank, according to federal prosecutors.

A Rancho Mirage man was sentenced in Philadelphia Wednesday to 51 months in prison for a fraud scheme that caused an out-of-state bank to lose $5.3 million.

Steven Pitchersky, 65, was also ordered to pay more than $3.2 million restitution and serve five years of supervised release.

Pitchersky, who operated mortgage lending Nationwide Mortgage Concepts in California, pleaded guilty to a federal wire fraud charge last September for his involvement in a scheme to defraud Detroit-based Ally Bank, according to federal prosecutors.

The case was handled in Philadelphia by the U.S. Attorney's Office in the Eastern District of Pennsylvania.

"Greed got the best of Pitchersky ... (he) drew down millions of dollars on a warehouse line of credit with Ally through lies and false pretenses, faking that he used Ally's funds to pay off refinanced mortgages while, instead, he used the money in part to fund his luxurious lifestyle and extravagant art collection," said Christy Romero, a special inspector for the U.S. Department of the Treasury's Troubled Asset Relief Program.

According to court papers, Nationwide Mortgage Concepts was licensed in more than 40 states to originate and refinance mortgages, and was authorized to originate Federal Housing Administration and veterans' mortgages.

In August 2009, Ally's suburban Philadelphia office oversaw the bank's agreement to give Nationwide a line of credit, which the company used through January 2011 to refinance mortgages, including mortgages held by institutions such as Bank of America and Wells Fargo, according to the government.

In November 2008, Pitchersky had formed a title company called Hanover Settlement Inc. in Hanover, Pa., west of Philadelphia, but he told Ally he didn't have any affiliated title companies or closing agents.

"Unbeknownst to Ally, defendant Steven Pitchersky covertly instructed Hanover to forward to (Nationwide Mortgage Concepts) all money it received from Ally to pay off First Mortgage Banks during the refinancing process," according to court papers. "This subterfuge allowed defendant Pitchersky complete control over money NMC acquired from Ally's warehouse line (of credit). Defendant Pitchersky used Ally's money for purposes other than for what it loaned for."

In January 2011 Nationwide didn't pay off a Michigan homeowner's mortgage with Bank of America, instead using the roughly $230,000 from Ally "for other purposes." Pitchersky later made a monthly payment of around $1,700 on the man's Bank of America loan, according to court papers.

"At this point, (the alleged victim) believed his loan with Bank of America had been paid off by NMC," the document states. "Pitchersky devised this scheme so that he could use Ally money to originate more mortgages than the mortgages Ally had agreed to fund, and thus earn more fees for himself and NMC."

From December 2010 to January 2011, Ally advanced Nationwide about $5.3 million to pay off 23 first mortgages for clients, but Nationwide "failed to use these funds to pay off these mortgages and instead used the money to pay off first mortgages for other customers," according to court papers.

– City News Service.


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