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Massive mortgage fraud case ends

12th defendant gets 70-month sentence; US says ring left foreclosures in wake

By Jenifer B. McKim
Globe Staff / May 26, 2011

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The 12th and final defendant involved in a massive Massachusetts mortgage-fraud ring has been sentenced to 70 months in prison, closing a case that stemmed from a federal investigation into sales of 21 properties from Cohasset to South Boston.

Ralph Appolon, 30, a loan officer formerly from Watertown, was sentenced in US District Court in Boston for his role in the 2005 conspiracy that resulted in about $10.6 million in fraudulent mortgage loan proceeds, federal prosecutors said yesterday.

The scheme — one of the largest mortgage fraud prosecutions in state history — involved inflated purchase prices, “straw buyers,’’ and phony documentation that defrauded 10 mortgage lenders and led to a swath of abandoned and foreclosed homes in South Boston, Dorchester, Jamaica Plain, Quincy, Hyde Park, and Cohasset.

US Attorney Carmen M. Ortiz said the investigation and prosecution required extensive governmental resources and should put the lending and real estate industry on high alert. “If you engage in fraud in order to line your pockets at the expense of others, we will spare no expense investigating and prosecuting you,’’ Ortiz said.

Appolon was convicted of charges related to two properties, in South Boston and Dorchester, for which he allegedly inflated sale prices negotiated with sellers by as much as $80,000. Prosecutors said he pocketed more than $150,000 in illegal profits.

Appolon’s lawyer, Derege B. Demissie of Cambridge, said he plans to file an appeal, arguing that some of the fraudulent loan documents attributed to his client were created and submitted by others.

The sentencing wraps up the case against a dozen defendants including lawyers, a real estate broker, and loan officers who were charged with recruiting stand-in buyers whose names and credit information were used to purchase homes they never planned to live in.

Earlier this year, Eric L. Levine, a former Brookline lawyer described by federal prosecutors as the leader of the scheme, was sentenced to 12 years in jail.

Other defendants in the case received sentences ranging from probation to 87 months in prison.

Jenifer B. McKim can be reached at jmckim@globe.com.