Yes, Mortgage Brokers Can Go to Jail for Mortgage Fraud

by Isaac Benmergui, Esq on January 2, 2014

The law is impartial, blind and indiscriminate, even to those with legal authority. Never forget that. This is definitely the case when the news presented a story about a mortgage broker from Woodbury, Massachusetts, sentenced to 1 to 3 years imprisonment for essentially stealing above $650K from his participating mother-in-law. It was, of course, a real estate scam, but the mother-in-law was unaware of it.cell bars

The broker is a man by the name of John Tuozzo, age 48, pleading guilty to first-degree scheme to defraud and second-degree grand larceny. He was sentenced in a Mineola courtroom. He was, at least, honest, you can tell. The specific details of the case were, however, such that you could call the man a dupe for trying to get away with it. He essentially “tricked” his mother-in-law to sign several real estate documents, allowing him to acquire those funds from various financial establishments. The worst of it, though, was the fact that he left his own mother-in-law facing the potential civil lawsuits, coupled with an impending foreclosure, for a $1MM home, a home she had no idea she actually owned. Call that insult to injury.

I stress, though, that Tuozzo was a dupe in trying to get away with it – his intentions, though, might’ve been “understandable, as Tuozzo and his wife were trying to obtain two mortgages, totaling $939K, for the purposes of purchasing a home on Harvard Avenue in Merrick, MA. It didn’t work out so well, resulting in bankruptcy, which prevented them from securing the financing they required independently.

So he tried this “scam,” planting his own mother-in-law right in the middle. Smart. You wouldn’t be surprised to know that the mother-in-law is now an ex­-mother-in-law given that Tuozzo and his wife had divorced back in 2009. Big surprise there.

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