Former Rhode Island Attorney Pleads Guilty to Bank Fraud, Tax Evasion Charges
|U.S. Attorney’s Office February 01, 2012|
PROVIDENCE, RI—Former R.I. attorney James D. Levitt, 66, pled guilty in federal court in Providence today to three counts of bank fraud and two counts of filing false tax returns for his role in a million-dollar mortgage fraud scheme. Levitt faces up to 96 years in federal prison and a fine of up to $3.3 million dollars when he is sentenced by U.S. District Court Judge John J. McConnell, Jr., on April 19, 2012.
Levitt’s guilty plea was announced by U.S. Attorney Peter F. Neronha; Cortez Richardson, Special Agent in Charge of the HUD Office of Inspector General; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; and William P. Offord, Special Agent in Charge of the Boston office of the Internal Revenue Service, Criminal Investigation.
At today’s change of plea hearing, Levitt admitted to the court that between July 2006 and November 2007 he applied for and received, based on fraudulent information, three mortgages totaling more than $1.1 million for two properties in Providence and one in East Providence. He used two of the mortgages to buy the Providence properties from an acquaintance that was experiencing financial problems and was facing foreclosure on the properties. Levitt admitted that he offered to assist his acquaintance by purporting to obtain a buyer for the properties who was qualified to obtain financing to purchase the properties.
In order to finance the purchases, Levitt admitted that he induced a business associate to apply for the mortgages by representing to him that they would be partners, would refurbish the properties as condominiums and sell them at a profit. Levitt admitted that the mortgage applications and settlement statements contained false information; including failing to identify the true purchaser of the property and falsely stating that the buyer was putting a down payment in excess of $100,000 for each property.
Levitt admitted to the court that he conducted the closings on the properties despite his financial interest and despite the fact that he was a disbarred attorney. After the closings, Levitt obtained and deposited the majority of the proceeds of the sale of the properties, approximately $270,000, into bank accounts which he controlled. He provided $25,000 of the proceeds to the seller of the properties shortly after the closing, and he later made periodic payments. However, Levitt admitted that he used the majority of the proceeds for his business and for personal expenses. The two properties eventually went into foreclosure.
Levitt admitted to the court that he used the third mortgage to buy a property from another company he controlled. He applied for the mortgage in his own name. The application also contained false statements and omissions, including an affirmation by Levitt that there were no outstanding judgments against him when, as he admitted to the court, he knew that there was an outstanding judgment against him of approximately $432,728 by the State of Rhode Island, which represented restitution owed to the State on a prior criminal conviction.
Levitt also admitted to the court that he failed to disclose to the Internal Revenue Service in tax filings in October 2007 and October 2008 derived income from the ventures as well as from other sources.
The case is being prosecuted by Assistant U.S. Attorney Luis M. Matos.
The matter was investigated by the U.S. Department of Housing and Urban Development Office of Inspector General, Federal Bureau of Investigation, and Internal Revenue Service-Criminal Investigation.