'Central' figure in $14M mortgage fraud sentenced to 5 years

A Bucks County man at the center of a $14 million mortgage fraud that scammed 35 homeowners during the housing bubble last decade finally received his punishment today, sentenced to five years in federal prison.

Edward G. McCusker of Upper Makefield played a "central role" in the scheme that victimized homeowners in Pennsylvania and New Jersey and took four years to play out in court after the initial indictment was handed down in 2009.

U.S. District Judge Mary McLaughlin said McCusker "probably was the brains behind it" in a ring that also included his wife, Jacqueline McCusker, two Doylestown bankruptcy attorneys and a fellow mortgage middleman. A jury convicted Ed McCusker on 15 counts of wire and mail fraud.

Jacqueline McCusker, convicted earlier on nine counts of wire and mail fraud, was sentenced by McLaughlin later in the afternoon to one year of home detention and three additional years of probation. She will be allowed to seek work as a registered nurse.

"It was Ed McCusker's coordination that adversely affected 35 people," said Stuart Eisenberg, who represents 17 of the victims in a pending civil case and was reached after the sentencing by phone. "They were lied to. Everybody lost title to their house. "

The prosecution of the fraud is one of the longest running cases of its type that observers familiar with mortgage fraud cases can recall. It's been more than two years since a jury found the McCuskers guilty and four years since three others pleaded guilty.

One of McCusker's victims, Susan Edge, had nearly paid off the mortgage on her Quakertown farmhouse when tragedy struck her family and she fell into arrears. She responded to an unsolicited piece of mail advertising mortgage relief. Today, she has no equity in the house and faces eviction when the property is put up for sheriff's sale later this year.

Contacted after the sentencing, Edge said she bears no animosity toward McCusker. But she prays that one day she'll receive some restitution and "we'll be able to bail ourselves out."

"Unfortunately, it seems like we're the little guys and nothing will come our way," Edge said. "It just seems hopeless."

One of the lawyers who participated in the scheme, Stephen G. Doherty, was sentenced Wednesday by McLaughlin to a year and a day - the minimum sentence for a felony.

A frazzled McLaughlin called Jacqueline McCusker the "least culpable" and said that no one had intended to defraud the homeowners. The judge declared the entire episode to be "a debacle for everyone."

In addition to the five-year federal prison sentence, Ed McCusker was ordered to forfeit $400,000 to the federal government, but his wife and the other mortgage middleman, John Bariana, will be required to contribute to the total. Bariana's sentencing is scheduled for next Tuesday.

One reason the trial lasted so long involved the health of Ed McCusker, a tall, well-built man who wore a dark suit and tie at his sentencing. McCusker suffers from Crohn's Disease, according to his attorney Lynanne Wescott, and other issues.

Judge McLaughlin even asked him if he was healthy enough to stand as she formally sentenced him.

Though the McCuskers have managed to remain in their $1.2 million Upper Makefield, Bucks County, home, they received court-appointed defense attorneys, who have been paid at least $224,000 over the course of the trial.

Following the hearing, Ed McCusker sprinted 60 yards along a 6th Street sidewalk with a jacket over his head to avoid reporters. He declined to comment and disappeared into an underground parking garage under Independence Mall.

McLaughlin granted McCusker 45 days to self-surrender to a federal prison. McCusker's attorney requested more time so that his client could undergo an operation for his medical problems. McCusker is currently out on previous bail.

McLaughlin said at sentencing she would allow McCusker to seek a special federal detention center that could treat his extensive health problems but did not grant McCusker's attorney's request for more time as a free man.

"I don't wish him any harm, and hope he gets better," Edge said of McCusker's illness. "But isn't being able to choose a jail like being allowed to choose a house? What do you do, browse the Internet and pick out the best?"

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 a 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.

Still, McLaughlin said she remained unsure at the total loss that the ring incurred upon the homeowners. Wescott, attorney for Ed McCusker, argued at sentencing that the McCuskers' take from what McLaughlin described as "a debacle" amounted to nothing.

McCusker, who has previously been convicted of identity theft and fraud, was also given three years' court supervision after he is released from prison.

"I wish I could say Mr. McCusker that you would not commit any more crimes," McLaughlin said. "I do fear recidivism here."

Wescott said in an interview last week she would "absolutely" appeal McCusker's sentence and the judge acknowledged that likelihood, noting that Wescott also told her prior to sentencing that an appeal would be filed.

McCusker's sentence of 60 months, however, was less than what the federal guidelines called for, which McLaughlin said was 78 to 97 months.

He was ordered to report to prison April 23.