Home Courts Valhalla ‘foundation’ mortgage fraudster sentenced to 11 years in prison

Valhalla ‘foundation’ mortgage fraudster sentenced to 11 years in prison

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The mastermind of a phony mortgage debt relief scheme who ran a make-believe foundation in Valhalla was sentenced Feb. 28 to 11 years in prison.

Birkin HermesU.S. District Judge Nelson S. Roman also sentenced Jacqueline Graham, 54, to five years of supervised release and ordered her to repay $694,450 to her victims and to forfeit $138,942 in ill-gotten gains.

“As the overwhelming trial evidence demonstrated,” prosecutors state in a sentencing memorandum, “Graham was the mastermind behind a highly complex and sophisticated, massive, years-long national fraudulent scheme.”

The prosecutors recommended a prison sentence of nearly 22 years to more than 27 years. Graham’s attorneys recommended one year and a day.

The mortgage scheme was based in Valhalla at an organization originally called the Pillow Foundation and later as the Terra Foundation. But it was not an official tax-exempt organization.

Graham and other conspirators offered to reduce or eliminate homeowners’ mortgage debts, in exchange for monthly fees for various services.

From 2011 to 2012, they filed more than 60 mortgage discharge papers with county clerks, on $38 million in loans, making it appear as if their clients had paid their debts. The documents were false, the deception was discovered, the mortgages were reinstated and the clients had to pay substantial fees.

Her co-conspirators pleaded guilty to wire and bank fraud charges. Anthony Vigna, an attorney from Thornwood, was previously sentenced to a year and a day in prison. Bruce Lewis, formerly of Alaska and Washington state, was sentenced to seven years in prison.

John Ruzza of Mahopac, Rocco Cermele of Yonkers, and Paula Guadagno of Verplank have not been sentenced.

Graham was the only one to contest the charges, and last June a federal jury in White Plains found her guilty.

One of Graham’s victims is battling three types of cancer, lost the family home and paid out $25,000 in fees, assistant prosecutors David R. Felton, Michael D. Maimin and James McMahon stated in their sentencing memo.

Graham advised the woman to declare bankruptcy and “promised her that she would save so much money that she would be able to wear Armani shirts,” according to the sentencing memo. After the woman was evicted and her credit rating plummeted, Graham extracted more fees for bogus credit restoration services.

She defrauded a military veteran who works as a florist and landscaper out of $501,100.

Graham’s attorneys – Bruce D. Koffsky of Stamford and Peter J. Schaffer of the Bronx – depict her as the product of a broken home and two physically abusive marriages. Despite the history of domestic violence, she found a good partner for her third marriage and raised four children and cared for a grandson.

She has numerous medical ailments. She has no previous criminal history. She was recruited to the Terra Foundation by co-defendant Bruce Lewis, when her own property was in foreclosure.

The picture that emerges from support letters submitted to the court, her attorneys state, “is of someone who is committed to family, friends, and those less fortunate; a conscientious parent, a hard worker and a portrait strikingly at odds with the image of a participant in this conspiracy.”

They argue that her role was “virtually indistinguishable from that of her co-defendants,” and they recommended the same sentence that Vigna got — a year and day.

But Graham was more culpable than her partners, according to the prosecutors, because she personally befriended and defrauded at least one victim; she controlled Terra’s bank accounts; she instituted the policy of charging victims for fraudulent services; she tried to conceal her role by demanding that her name be removed from key documents; she hid some of her ill-gotten gains in Germany; and she alone refused to accept responsibility for her conduct.

“Graham,” the prosecutors stated, “was at the very top of the Terra fraud.”

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