BOSTON -- Nineteen people, including several lawyers and a Cambridge city councilor, have been indicted on charges they defrauded the Dime Savings Bank of New York and its Massachusetts subsidiary out of millions of dollars, authorities said Thursday.
The FBI began rounding up the suspects Thursday morning and, by 4 p. m. EDT, nine of the 12 subject to arrest had been taken into custody. Among the three at large was the councilor, William H. Walsh, a prominent local lawyer, an FBI spokesman said. The remaining seven will be summonsed to court.
'Essentially, the nature of the fraud is that individuals falsely representated that downpayments had been made on housing units, particularly condominium units, when they really hadn't. Either that or they were backed by fraudulent or undisclosed second mortgages,' U.S. Attorney John Pappalardo said.
The alleged scheme resulted in 54 mortgage loans going toward the purchase of condo units at the Greentree development in South Weymouth, Brandywine in Shrewsbury, and Country Village Estates in Taunton and properties in Brockton and North Attleboro.
Dime Savings, through its Dime Real Estate Services subsidiary in Massachusetts, was one of the largest residential real estate lenders in the state in the 1980s. Pappalardo estimated that the alleged scheme cost Dime $5 million to $8 million.
'Two of the four indictments charge a Dime loan representative, Arthur Peach, with participating in the fraud. Both also charge a number of Massachusetts attorneys with participating in the fraud as sellers, buyers or attorneys representing parties (allegedly involved in the scheme),' Pappalardo said.
The defendants included seven lawyers, four developers, three real estate brokers, four investors and a loan originator.
The most prominent of the group was Walsh, 47, a founding partner in the law firm Ferraro & Walsh of Cambridge. He faces one count of conspiracy and 29 counts each of bank fraud and making false statements to a federally insured bank.
Pappalardo described Walsh as a 'major' real estate developer and a closing attorney in the scheme.
Other defendants include Dennis M. Cargill, 47, of Saugus, a real estate broker; Ann Frances Gottlieb Schwartz, 38, of Elizabeth, N.J., formerly a Cambridge resident and a lawyer with Ferraro & Walsh; Ann Jarosiewicz, 32, of Cambridge, a paralegal with Ferraro & Walsh;
Arthur E. Peach, 47, of Easton, a loan originator with Dime; J. Gregory Griffin, 45, of Cambridge, a former associate at Ferraro & Walsh; Peter T. Nassif, 47, of Brookline, owner of Liberty Real Estate in Allston; Lawrence R. Vallancourt, 49, and Sheila A. Vallancourt, 47, a couple who own Vallancourt Realty in Brockton;
Marilyn Gardner, 43, of Milton, a condo saleswoman; William F. Lemoine, 43, of Sevierville, Tenn., Eugene L. Kaplan, 42, of New Rochelle, N.Y., and Paul S. Desberg, 36, of Sharon, each of whom allegedly hired 'straw' buyers to defraud Dime;
Alan Segal of Newton, a lawyer; Robert Kline of Newton, a lawyer; Charles McCormick of Canton, a real estate investor; David E. Burns of Lexington, a developer; Thomas Behenna; and Sandra Epstein, a lawyer.
Thomas A. Hughes, special agent in charge of the FBI's Boston office, said the indictments are the latest in a crackdown on bank fraud throughout New England.
The FBI is currently investigating the failure of 42 financial institutions, in addition to 218 other major fraud probes, he said.
