2 indicted in NYC over $44 million mortgage scheme

NEW YORK—Two former owners of a defunct mortgage firm were charged on Thursday with stealing $44 million from Fannie Mae and forging paperwork in loan sales to Credit Suisse.

Leib Pitner and Barry Goldstein faced arraignment in federal court in Brooklyn on wire and bank fraud charges. The names of their attorneys were not immediately available.

Before losing its license in 2004, the defendants' firm, Brooklyn-based Olympia Mortgage Corp., was involved in refinancing homeowner mortgages for Fannie Mae, the nation's largest buyer of home loans.

An indictment accuses Pitner of secretly pocketing $44 million in Fannie Mae payoffs of 257 original loans.

"Pinter used the proceeds to pay Olympia's operating expenses and enrich himself and others," the indictment said.

In addition, Goldstein peddled so-called non-performing loans to Credit Suisse by having his employees "create fraudulent or 'dummy' loan histories" that made it appear that payments had been made on time, the indictment said.

Both men face up to 30 years in prison if convicted.

Fannie Mae, along with smaller Freddie Mac, are government-sponsored mortgage finance companies.