The former chair for North Castle's local Republican Party organization pleaded guilty to two felony-level counts of mortgage fraud, the Westchester County District Attorney's office announced Tuesday.
Loronda Murphy, 48, pleaded to one count of first-degree mortgage and a second-degree count in the same offense. Additionally, 46-year-old New Rochelle area resident Scott Forcino pleaded guilty to a single count of 4th-degree criminal facilitation, a misdemeanor.
The District Attorney's office states that from April to June in 2009, Murphy and Forcino operated under the Settle One Corporation, a home mortgage closing company with an Armonk address. The pair are accused of deceiving homeowners who took out second mortgages, with the impression that the money would pay off their existing mortgages and that Forcino would oversee closings.
The DA's office states: "However, Forcino instead allowed Murphy to fraudulently assume the role of attorney foreach closing, and, much to the homeowner's surprise, rather than paying off their pre-existingmortgage, Murphy instead stole portions of their new loan money and left their pre-existingmortgage unpaid."
The announcement ads that the homeowner was left with "the unsustainable burden of having multiplemortgages on their family home at one time."
The pair were accused of deceiving five victims, with Murphy's father among them, and taking more than $50,000.
Murphy, according to the DA's office, tried to cover up by diverting remaining funds from Settle One to pay the existing mortgages. She is also accused of submitting fake mortgage documents to two lenders, Live Well Financial and Wells Fargo Bank, and getting more than $1 million from them.
Murphy has been ordered to pay $720,288 in restituion, the DA's office announced. She is scheduled to be sentenced on Jan. 8, 2013 and could face up to 25 years in prison, although the amount of restitution she pays could affect how much prison time she receives.
Forcino, meanwhile, faces up to one year in jail, the DA's office stated.
“This type of criminal activity is what contributed to the collapse of the nation’s residential housing market thereby prolonging the “Great Recession” from which many Americans are stillrecovering,' District Attorney Janiet DiFiore said in a press release. "These defendants, one a former Town political leader and the other an Officer of the Court, built a corrupt enterprise abusing the lending process and defrauding numerous victims," she added.