Couple Pleads Guilty To Mortgage Fraud Scheme

CONTACT:      Barbara Burns
PHONE:        (716) 843-5817
FAX:           (716) 551-3051

BUFFALO, N.Y. — U.S. Attorney William J. Hochul, Jr. announced today that Timothy McCabe, 50, and Theresa Morales, 50, of Florida (formerly of Buffalo), pleaded guilty before U.S. District Court Judge Richard J. Arcara, to bank fraud. The charge carries a maximum penalty of 30 years in prison, a fine of $1,000,000, or both.

Assistant U.S. Attorney Maura K. O’Donnell, who is handling the case, stated that the defendants executed a scheme to obtain mortgages, re-financing, and home equity credit lines, totaling $2,580,000, from various financial institutions. In furtherance of the scheme, McCabe and Morales put together loan applications, which contained materially false information as to defendant Morales’ employment and income, and as to the couple’s intent to reside at the properties as owner/occupants. The loan applications were then submitted to the financial institutions, either directly by the defendants, or through Nickel City Funding, a Western New York mortgage broker.

Relying on the representations in the loan applications, as well as false verifications provided by defendant McCabe, the financial institutions granted the loans, which totaled $2,580,000. The defendants made only minimal payments on the loans, causing the properties to go into foreclosure, and resulting in a loss to the financial institutions in excess of $1,000,000.

The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, and Special Agents of the United States Secret Service , under the direction of Special Agent in Charge C. Todd Laster.

Sentencing is scheduled for April 17, 2015, at 12:30 p.m. before Judge Arcara.