Final sentencing held in $14M mortgage fraud
The final member of a five-person $14 million mortgage fraud ring was sentenced today to 18 months in prison, putting an end to a case that began more than four years ago.
John Bariana, 41, pleaded guilty in August 2010 to 12 counts of wire fraud and mail fraud related to at least 35 fraudulent mortgage loans during the height of the housing bubble early last decade.
He co-owned a company called Axxium Mortgage with Edward and Jacqueline McCusker, who were both sentenced last week. Ed McCusker was sentenced to 60 months in federal prison and his wife, Jackie, received one year home confinement. All three also received three years probation and must forfeit a combined $400,000 to the U.S. Attorney's Office.
Two Doylestown bankruptcy attorneys, Jeffrey A. Bennett and Stephen G. Doherty, also were sentenced last week by U.S. District Judge Mary McLaughlin, who oversaw the case ever since indictments against the five were handed down in 2009.
Doherty was sentenced to a year and a day — the shortest possible sentence for a felony conviction — and Bennett was given 18 months. They were ordered to forfeit a combined $200,000 to the government.
In the case of the McCuskers’ ring, the bankruptcy attorneys, Doherty and former Doylestown Supervisor Jeffrey A. Bennett targeted people in financial straits who had substantial equity in their homes. The attorneys steered them to the mortgage company run by the McCuskers and John Bariana, who would, in turn, co-sign with homeowners for new mortgages, prosecutors said.
Fraudulent paperwork was then prepared without homeowners’ knowledge, often with the forged signatures of the homeowners on the documents. The scammers would enter into a lease-buyback agreement with the original homeowners, who would agree to pay rent with the understanding that it would be used to pay off the new mortgage. But the McCuskers took the rent money, authorities say, and pocketed it.