Massachusetts Mortgage Fraudster Joseph Bates Pleads Guilty To Operating A $4.3 Million Scam For Almost A Decade

A Massachusetts mortgage fraudster admitted in court that he took part in a nearly decade-long mortgage fraud scheme. He also admitted that he defrauded financial institutions of millions of dollars.

Joseph Bates pleaded guilty last week in federal court to one count of conspiracy and three counts of wire fraud. He also confessed to two counts of bank fraud. 

Bates and his cohorts took part in a mortgage fraud scheme that stretched from 2006 through 2015. The scam involved at least two dozen fraudulent loan transactions that caused $4.3 million in losses to lenders.

The Massachusetts Mortgage Fraudster and his cohorts aided in the submission of false borrower information to a number of lenders for properties in Massachusetts.

The properties were primarily multifamily buildings of two-to-four units. Bate and accomplices converted into condominiums.

The fraudsters recruited borrowers to purchase the individual condo units. Bates and his partners also set up the buyers fraudulent mortgages.

Bates and others supplied bogus information submitted to lenders included false information about the borrowers’ employment. The mortgage applications contained fraudulent employment information. The applications also indicated the borrowers were employed by shell companies that were used as part of the scheme.

The employment information showing borrowers earned income from those companies. As it turned out, the borrowers grotesquely overstated their income when they received little or no income from those supposed jobs. 

The conspiracy also involved preparing fake tax returns that contained false and inflated income. Some of those tax returns were submitted to lenders in support of the fraudulent loan applications.

And because the borrowers did not have the ability to repay the loans in question, in many cases, they defaulted on their loans. Those defaults resulted in foreclosures and losses to the financial institutions of more than $4.3 million.