Lawyer gets year in prison for role in $14M mortgage fraud

Four years after a Doylestown attorney pleaded guilty to a mortgage fraud scheme that roped in 35 homeowners and sucked equity from their properties, Stephen G. Doherty was sentenced to a year and a day in a federal prison.

Doherty was also ordered to forfeit the $202,000 he and his law partner Jeffrey A. Bennett divided up from the $14 million scheme. He is the first of five white-collar professionals involved in the scheme to be sentenced. The rest will be sentenced by next week.

U.S. District Judge Mary A. McLaughlin, who has presided over the case since the Dec. 2009 indictments, granted Doherty 45 days to surrender to a federal prison. She said while imposing the sentence that she’s struggled throughout the long trial to comprehend how much the victims of the scam, all Bucks County homeowners, actually lost.

The judge described the massive fraud as "a foolish business model, if not something worse than that."

"I wish I could conclude no incarceration was necessary," McLaughlin told Doherty as he stood before her and his wife cried in pews that included about 15 family and friends.

She added at the hearing's conclusion, "Mr. Doherty, you are a lucky man for so many family and friends. I wish you the best."

The four other defendants in the case are scheduled for sentencing Thursday, Friday and next week. Edward and Jacqueline McCusker, a couple from Upper Makefield, will be sentenced Thursday for their roles. Bennett, a former elected official on the Doylestown Board of Supervisors, will be sentenced Friday. John Bariana, a colleague of Ed McCusker, will be sentenced next week.

Ed McCusker and Bariana were deemed "most culpable," McLaughlin said during Doherty's hearing.

It remains unclear how much total forfeiture the judge will require from all five. The McCuskers are currently living in a $1.2 million McMansion just south of New Hope that their court-appointed lawyers have said is underwater from multiple mortgages.

McLaughlin admonished the U.S. Attorney's office for the timing of its forfeiture request of roughly $1 million. Prosecutors filed their request Feb. 11, one day after sentencing hearings were scheduled.

But Assistant U.S. Attorney Nancy Rue implied the timing should not be an issue. She said the loan proceeds the government is seeking through forfeiture have "been true in 2011, would have been true in 2012, would have been true in 2013, is true now."

Doherty was ordered to surrender April 23, pay $8,500 in fines, and then be subject to two years court supervision upon release from federal prison. McLaughlin told his defense attorneys she would ask the probation office to let Doherty serve his 366 days at a federal prison close to his family in Bucks County.

Contact Brian X. McCrone at 215-854-2267 or Follow @brianxmccrone on Twitter.

Contact the Breaking News Desk at 215-854-2443; Follow @phillynews on Twitter.