A Long Island real estate developer already convicted of laundering bribes to a former congressman was indicted along with eight others in a $90 million mortgage fraud scheme, federal prosecutors said Thursday.
Millionaire Thomas Kontogiannis, 60, behind bars in a California corruption scandal, was accused of bilking Washington Mutual Bank and the DLJ Mortgage company in a massive scheme involving fake multiple sales of land in Brooklyn and Queens from 2003 to 2007, according to an indictment.
The defendants staged the sales of the same properties in East New York, Brooklyn and College Point, Queens to straw buyers to get multiple mortgages on the same properties, said U.S. Attorney Benton Campbell. To hide the fraud, Kontogiannis allegedly changed the location of the East New York properties to fictional addresses in nearby Howard Beach, Queens, the prosecutor said.
The straw buyers included Kontogianni's relatives, high ranking members of his companies and construction workers and security guards who worked for him, according to the indictment.
Eight suspects -- including Kontogianni's nephew and son-in-law -- pleaded not guilty Thursday in Brooklyn federal court and were released on bonds ranging from $4 million to $500,000, officials said. They are due back in court June 29th.
Kontogiannis pleaded guilty in 2007 for laundering bribes paid to former Republican congressman Randy "Duke" Cunningham of California and is currently serving an eight year federal prison sentence.
"The indictment sets forth a soup-to-nuts mortgage fraud scheme that included false loan files containing phony information, fraudulent appraisals, fictional addresses, fake title reports and phantom title insurance," said Joseph Demarest, head of the FBI's New York office.