A federal judge in Rhode Island on Wednesday sentenced a former mortgage attorney from Needham to five years of probation, and ordered him to pay more than $600,000 in restitution for defrauding mortgage holders and lending institutions and running a Ponzi scheme, according to a spokesman for the United States Attorney’s Office in Rhode Island.
David L. Spector, 52, pleaded guilty in May of this year to three counts of wire fraud and one count of money laundering, according to a statement from the AG's office.
Spector admitted that between April and October of 2007, he conducted real estate mortgage refinance closings for properties in Plymouth and Lawrence in Mass., and Westerly, R.I., according to the statement.
During the closing process, Spector transferred the proceeds of the mortgages obtained by his clients to his attorney escrow account for the purpose of redistributing them to pay off existing mortgages and other costs associated with the closing, according to the release.
But he admitted that instead of properly distributing the funds, he took $601,692 to run a Ponzi scheme to pay his personal expenses, and to pay off earlier mortgages that he had never paid off, according to the release.
He filed change of address forms with mortgage companies that had not been paid off to keep his clients from finding out what he was doing, according to the release. The bills went to a post office box that he controlled.
The government requested that Spector receive 2 years imprisonment and full restitution, said Jim Martin, Public Information Officer for the U.S. Attorney’s Office in Rhode Island.
U.S. District Court Judge John J. McConnell, Jr. sentenced Spector to five years probation, with the first year to be served in home confinment; 300 hours of community service; and full restitution of $607,074.24, said Martin.
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