Former mortgage company owner on the hook for $11.5m in fraud scheme

by Francis Monfort10 Dec 2018

A former owner of a Pennsylvania-based mortgage company has been ordered to pay more than $11.5 million in restitution and forfeiture after pleading guilty to a multimillion-dollar fraud scheme, the US Attorney’s Office for the Eastern District of Pennsylvania has announced.

David Fili Jr. was ordered by US District Judge Joel Slomsky to forfeit approximately $2 million and is jointly and severally liable to pay about $9.6 million in restitution. He was also sentenced to one day in jail and five years of supervised release, with the first 18 months of supervised release to be served in home confinement.

Fili previously entered a guilty plea to ten counts of wire fraud and two counts of bank fraud.

The case stems from refinance mortgage loans issued by Capital Financial Mortgage, which was co-owned by Fili along with George Barnard, between 2005 and March 2013.

Fili and Barnard diverted about $9.8 million to themselves from bank accounts belonging to the company and several title companies owned by Barnard instead of using the money to pay off their customers’ outstanding first mortgages.

At the time that the scheme fell apart, Fili and Barnard left more than two dozen customers stuck with two mortgages on their homes because the company had failed to pay off their existing first mortgages.

As part of his guilty plea, Fili admitted that he used much of the money he diverted to buy a vacation home and to support his gambling habit.

Barnard used the money he diverted to buy multimillion-dollar beach homes and several yachts and to pay the salary of a yacht captain. He was previously sentenced to five years in prison for his role in the scheme.

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