Home / Daily Dose / California Man Sentenced to 51 Months for Fraud
Print This Post Print This Post

California Man Sentenced to 51 Months for Fraud

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced that Steven Pitchersky of Rancho Mirage, California was sentenced to 51 months in federal prison for a scheme to defraud GMAC Inc., since rebranded as Ally.

Through his fraudulent actions, the company incurred losses of approximately $5.3 million. In addition to the prison term, Pitchersky is ordered to pay restitution in the amount of roughly $3.2 million, serve five years of supervised release, and a $100 special assessment.

"Greed got the best of Pitchersky, and for his crimes, he will spend the next 51 months in federal prison," said Christy Romero, Special Inspector General. "Through his mortgage origination company, Pitchersky ran a $5.3 million mortgage fraud scheme that caused millions of dollars in losses to Ally Financial, which still owes billions in TARP funds."

Pitchersky operated Nationwide Mortgage Concepts (NMC), a California Mortgage Lender. Between 2009 and 2011, Ally was the warehouse lender for thousands of mortgages loans. NMC borrowed from a $10 million warehouse line of credit to refinance first mortgages held by other institutions.

Pitchersky misrepresented himself to Ally in order to secure the warehouse line of credit, including a false representation that NMC already had another $10 million warehouse line of credit with another company. The company, "MPL," was a fake, with a contact number listed for a "Rick Jay" that dialed to Pitchersky's cell phone.

He funneled the funds through a third-party title company, "Hanover," which was actually created by Pitchersky, allowing him to have complete control over money NMC acquired from Ally's warehouse line.

"Between December 2010 and January 2011, Ally advanced NMC approximately $5.3 million to pay off 23 first mortgages for NMC clients. NMC failed to use these funds to pay off these mortgages and instead used the money to pay off first mortgages for other customers," SIGTARP said.

In total, $17.2 billion in federal taxpayer bailout funds were invested in Ally Financial through TARP. Pitchersky pled guilty to wire fraud in connection with the scheme.

About Author: Colin Robins

Colin Robins is the online editor for DSNews.com. He holds a Bachelor of Arts from Texas A&M University and a Master of Arts from the University of Texas, Dallas. Additionally, he contributes to the MReport, DS News' sister site.
x

Check Also

The Most At-Risk Housing Markets

According to a new report, counties in these states are most vulnerable to the economic impact of the coronavirus, with a high volume of underwater homes and high wages required to pay for major homeownership expenses.

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.