A Mansfield developer and real estate broker awaiting trial on federal mortgage fraud charges related to a string of foreclosed properties in Dorchester and Roxbury has surrendered his Massachusetts real estate license, the state Division of Professional Licensure said Tuesday.
Michael David Scott, also agreed not to renew his license or ever apply to the board for “licensure of any kind,’’ the state said in a press release. Scott also must transfer any funds he holds because of his real estate job to a Boston area law firm by Tuesday and notify clients that he can no longer represent them as a licensed broker, the state said.
“Scott must also transition all pending real estate matters to other licensed brokers no later than 5 p.m. on April, 13, 2012,’’ the press release said.
Scott’s attorney, William Kettlewell, could not be immediately reached for comment. Licensure division spokesman Dan Rosenfeld declined to provide any details about why Scott agreed to give up his real estate license.
Scott’s exit from the real estate business comes two weeks after a Boston Globe story revealed that state regulations allowed him to keep working in the industry despite the federal case, prompting concerns among other Massachusetts real estate professionals.
At the time, Rosenfeld said the state launched an investigation into Scott’s business practices shortly after the fraud charges were unveiled in US District Court in Boston in 2010. The state “voluntarily stayed’’ the probe to avoid affecting the federal case.
While Massachusetts law does not prohibit a real estate broker under criminal indictment from working while his case moves through the court system, the state does have the power to suspend or revoke a license based on its own finding of wrongdoing.
Jessie Cuddy, a real estate broker with Boston Bayside Properties in Dorchester who had complained to the board about Scott, cheered the news.
“A piece of justice has been served,’’ she said.
Melvin Vieira Jr., an agent with Re/Max Landmark Realtors in Milton, said, “Finally, the system is working.’’
Scott, 46, is awaiting trial after pleading not guilty in federal court to 68 criminal counts related to allegations that he cheated mortgage lenders. The charges involve the sales of dozens of Dorchester and Roxbury condominiums between 2006 and 2008. Prosecutors say that Scott, two out-of-state recruiters, and others obtained funds to finance deals through “false and fraudulent pretenses’’ in a scam involving the conversion of multiple-family homes into condominiums, many of which went into foreclosure.
Meantime, Scott started a new company, The Crawford Group LLC, based in Quincy. On its website, he says the firm enjoys “a very high success rate with short sales.’’ A short sale allows a property owner to sell his home for less than what is owed on the mortgage, with approval from the lender.