BROOKLYN HEIGHTS — Two Forest Hills lawyers were convicted of pulling off a multi-million dollar mortgage fraud — helping take out bogus loans on properties around the city and Long Island and then pocketing the fees, U.S. Attorney Loretta Lynch announced Monday.
The lawyers, Matthew Burnstein, 40, and Aaron Rabinowitz, 40, engaged in a scheme that resulted in over $25 million in mortgage loans from several banks, including Countrywide Financial, Fremont Investment and Loan, IndyMac Bank, Sun Trust Mortgage, Inc., Wells Fargo & Company and New Century Mortgage Corporation.
“The defendants violated the trust placed in them as attorneys and further damaged the integrity of the real estate market,” Lynch said in a statement, first reported by Forest Hills Patch. “We will vigorously investigate and prosecute those who engage in mortgage fraud, including professionals who jettison their responsibility to reap rewards from the fraud.”
The lawyers, partners at the Forest Hils law firm Burstein & Rabinowitz, worked on real estate closings from January 2006 to September 2008, officials said.
According to the feds, the lawyers worked with real estate agents and loan officers to falsify documents in order to get mortgages for properties in Queens, Brooklyn and Long Island and collect attorney's fees.
Many of the properties were then purchased by "straw buyers" who then failed to make mortgage payments, resulting in millions of dollars of defaulted loans.
Burnstein and Rabinowitz will be sentenced on November 26 and face a maximum of 30 years behind bars.