We recently posted a story about mortgage fraud involving an El Monte, CA resident and now Steven Pitchersky, 64, of Rancho Mirage, was charged Friday, Aug. 2, in an indictment with one count of wire fraud for his role in an alleged mortgage refinancing scheme that involved the creation of shell companies and fictitious players to defraud Ally Financial of about $5.3 million.
Pitchersky who operated Nationwide Mortgage Concepts, is being accused of lying to Ally Bank and creating a scheme to obtain a $10 million warehouse line of credit from Ally and divert the funds during mortgage loan refinancing transactions for personal and corporate gain.
The indictment filed in U.S. District Court in Pennsylvania, reported that the alleged fraud involved the creation of a company, MPL, and the name of a man, Rick Jay of MPL, whose phone number led to the cellular phone of Pitchersky to foster the illusion of mortgage lending largesse with Ally, of Detroit.
Ally Financial, which once did business as GMAC Bank, was the recipient of about $16 million in federal funds from the Troubled Asset Relief Program, which was created to help homeowners in distress when the housing market crashed.
In August 2009, Ally agreed to provide Nationwide with a warehouse line of credit.
From December 2010 to about January 2011, Ally advanced the company about $5.3 million to pay off 23 first mortgages for Nationwide customers, the indictment says. However, Nationwide failed to use those funds to pay off those mortgages, the charging information says.
The money allegedly was used, instead, to pay off first mortgages for other Nationwide customers.
Find out more about warehouse lending and read the full story here: