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11th Sentenced in Flipping Scheme

Man receives sentence for alleged role in mortgage fraud scam

SPRINGFIELD, Mass. -- (Jan. 18) -- A Wilbraham man was sentenced today in federal court for conspiracy to launder money and wire fraud in connection to his role in a land-flipping and mortgage fraud scheme.

United States Attorney Michael J. Sullivan (http://www.usdoj.gov/usao/ma/usattorney.html); Sharon E. Ormsby, Acting Special Agent in Charge of the Federal Bureau of Investigation in New England; Douglas A. Bricker, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation; and Peter Emerzian, Special Agent in Charge of the Department of Housing and Urban Development's Office of Inspector General, announced today that MICHAEL BERGDOLL, age 42, of 10 Beechwood Drive, Wilbraham, was sentenced by U.S. District Judge Michael A. Ponsor to 2 years and 9 months imprisonment, to be followed by 3 years of supervised release. BERGDOLL was also ordered to pay restitution in the amount of $318,000 to the victim lending institutions. On May 4, 2006, BERGDOLL pleaded guilty to conspiracy to launder money and wire fraud.

At the earlier plea hearing, the prosecutor told the Court that, had the case proceeded to trial, the Government's evidence would have proven that BERGDOLL conspired with others to purchase distressed properties and then re- sell the properties at artificially inflated values. BERGDOLL induced prospective buyers by telling them they would not have to make any down payment and promising money back to the buyers at the real estate closing. The buyers were then referred to mortgage brokers who were involved in the land- flipping schemes.

Since many of the prospective buyers did not have the financial ability to qualify for the loans, BERGDOLL and his co-conspirators generated and produced false and fraudulent loans for the prospective buyers. The false documentation included false down payment information, fraudulent income information, and false documentation to show improvements to the properties that were never made. BERGDOLL and his co-conspirators also used real estate appraisers involved in the scheme to generate false and fraudulent appraisals to support the loan amounts for the artificially inflated property values.

Once the unwitting lending institutions approved the loan applications of the prospective buyers, BERGDOLL and his co-conspirators then referred the buyers to attorneys also involved in the scheme. The attorneys generated false and fraudulent real estate closing documentation to facilitate and conceal the fraud.

BERGDOLL is the eleventh person to be sentenced for participation in this fraudulent land-flipping scheme.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Department of Housing and Urban Development's Office of Inspector General. It was prosecuted by Assistant U.S. Attorney Paul Hart Smyth in Sullivan's Springfield Office.

Source: U.S. Attorney
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