March 20, 09

NEWS / FORMER EXECUTIVE OF OLYMPIA MORTGAGE CORP. SENTENCED FOR WIRE FRAUD CONSPIRACY

Fannie Mae Left Holding Nearly $44 Million in Unpaid Principal in Refinanced Mortgage Loans

Benton J. Campbell, United States Attorney for the Eastern District of New York, announced that Leib Pinter, a former executive of Olympia Mortgage Corp., was sentenced today to 97 months in prison for orchestrating a scheme to defraud Fannie Mae in connection with mortgage loans which Fannie Mae owned but were refinanced through Olympia. Pinter was also ordered to pay more than $43 million in restitution to the victims of his fraud scheme. The sentencing proceeding was held before United States District Judge Sandra L. Townes at the U.S. Courthouse in Brooklyn, New York, and followed Pinter’s guilty to a wire fraud conspiracy on September 11, 2008.

Olympia, formerly headquartered in Brooklyn, New York, originated and serviced mortgage loans owned by Fannie Mae. When Olympia refinanced a Fannie Mae mortgage loan, Fannie Mae typically wire transferred the money to an Olympia bank account. Olympia was then required to pay off the underlying mortgage loan by remitting the outstanding balance to Fannie Mae. Instead, Pinter misappropriated these proceeds for the benefit of Olympia. When the fraudulent scheme was revealed, Fannie Mae held nearly $44 million in unpaid principal in refinanced mortgage loans.

“The defendant took advantage of his relationship with Fannie Mae to enrich himself and others,” said United States Attorney Campbell. “This case is yet another example of the Justice Department’s swift and vigorous response to those who have corrupted our nation’s lending practices.” Mr. Campbell expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, the agency responsible for leading the government’s investigation. In May 2008, Mr. Campbell announced the formation of a task force comprised of federal, state, and local law enforcement agents and investigators to address the burgeoning problem of mortgage fraud.

The government’s case was prosecuted by Assistant United States Attorneys Jonathan E. Green and Daniel A. Spector.