Solo Pleads Guilty To Role In Mortgage Scheme
Not long ago, Genevieve Salvatore was a successful real estate lawyer and a local activist who championed food allergy awareness, prompted by her son's own peanut allergies.
She was also a rising star in Milford politics. As chair of the city's economic development commission, she launched a recycling initiative and supported the immediate renovation at Jonathan Law High School. In 2009, she nabbed the Democratic mayoral nomination. Dannel Malloy, before he became governor, attended a fundraiser for her. She was endorsed by the New Haven Register, whose editorial page called her an "enthusiastic and quick learner" and a "fresh alternative" to the Republican incumbent.
"I would like to enter this race not as a politician, but as a concerned citizen," Salvatore said at her first news conference as a candidate.
Not only did she lose the mayor's race by a wide margin, but on Nov. 19 she continued a stunning fall from grace when she pleaded guilty to taking part in a multi-million dollar mortgage fraud scheme. The plea came two years after she was accused of violating attorney ethics rules for her handling of two $1 million real estate deals. A grievance complaint led to an investigation which found that she had violated rules of professional conduct by giving legal advice to a real estate investor and implied that she was representing his interests, even though she was not.
Salvatore faced a potential suspension of her law license, but the case was put on hold for a bigger problem. Last February, Salvatore and three other lawyers were arrested and indicted for taking part in the unrelated, widespread scheme that involved 50 mortgages for multi-family homes obtained by fraud over a two-year period.
According to court records, the four attorneys participated in a plan to defraud lenders by falsifying mortgage applications and deed records. Officials said the scheme left rental properties throughout New Haven abandoned, and resulted in losses of more than $10 million to the lenders.
In the indictments of Salvatore, and three New Haven attorneys — Lawrence Dressler, Jeffrey Weisman, and Bradford Rieger — it was revealed that the group worked out deals with sellers of rental properties, who agreed to accept lower sale prices than what was listed on the sales contracts.
The group also enlisted straw buyers, including a group of New York City corrections officers, to apply for mortgages and obtain loans that were much higher than what the sellers were paid. To get the loans, the group submitted forms that included inflated values, falsified monthly income and fictitious leases.
The lawyers and other participants were then paid from the proceeds, prosecutors said, with Salvatore's take estimated at $2.5 million for the 13 closings she handled from December 2006 to February 2007.
According to charging documents filed by Assistant U.S. Attorney David Huang, the buyers did not make any deposits or down payments for the properties they purchased. Instead, Salvatore and her six co-conspirators used some of the fraudulently obtained mortgage proceeds to cover the down payments and deposits.