Former No. Castle GOP Chairwoman Pleads Guilty to Mortgage Fraud
Former North Castle Republican Chairman Loronda Murphy faces up to 25 years in jail after pleading guilty Tuesday morning to two felony counts in connection with a mortgage fraud scheme she operated in 2009.
Murphy, 48, who now lists a Greenwich, Conn. address as her residence, pleaded guilty before Acting state Supreme Court Judge Barbara Zambelli to two felony counts: first-degree and second-degree residential mortgage fraud, the top two counts in the indictment. She had originally been indicted last year on 18 felony counts and one misdemeanor charge.
She also must pay $720,288 in restitution to the victims, said Lucien Chalfen, a spokesman for Westchester County District Attorney Janet DiFiore. As a condition of the plea, the amount paid by the scheduled Jan. 8 sentencing will determine how much jail time Murphy will receive, he said. Chalfen said that Murphy is likely to receive a minimum of jail time even if she repays the entire sum by that date.
A second defendant, Scott Forcino, 46, a New Rochelle real estate attorney, pleaded guilty to one misdemeanor count of fourth-degree criminal facilitation for his role in the fraud. He faces up to one year in jail and must resign from the New York State Bar Association.
On Tuesday after the pleas were entered, DiFiore compared what Murphy and Forcino did to a Ponzi scheme.
“This type of criminal activity is what contributed to the collapse of the nation’s residential housing market thereby prolonging the ‘Great Recession’ from which many Americans are still recovering,” DiFiore said in a statement. “These defendants, one a former town political leader and the other an officer of the court, built a corrupt enterprise abusing the lending process and defrauding numerous victims.”
Murphy served as North Castle Republican chairwoman starting in 2009 until shortly after September 2010 raids were executed at her Armonk residence and at offices on Maple Avenue, which she used for town Republican Committee business. The raids led to an 11-month investigation by the district attorney’s office and North Castle police, culminating in the August 2011 indictments.
The raids also brought to light that Murphy had been arrested on a mortgage fraud charge in Suffolk County in February 2010. Her Long Island case is still pending.
The two counts that Murphy pleaded guilty to stemmed from two separate incidents, one from April 2009 and the other in June 2009, Chalfen said.
Murphy operated the Armonk-based mortgage closing company Settle One Corp. where homeowners would refinance with the understanding that Forcino would oversee the closing and that money from the new mortgage would pay off their pre-existing mortgage.
Forcino allowed Murphy to fraudulently assume the role of attorney for each closing. Rather than paying off the pre-existing mortgage, Murphy stole portions of the new loan money for personal gain, leaving homeowners with multiple mortgages on their house at the same time.
Five victims, all Westchester residents, were defrauded of at least $50,000 each, including Murphy’s father, for her personal gain, Chalfen said.
Murphy attempted to conceal her activity by using money in Settle One’s bank account to make monthly payments on various unpaid mortgages. In some instances Murphy used new mortgage money from one homeowner to pay off another homeowner’s previously unpaid mortgage.
She also prepared and submitted a series of false mortgage documents in connection with the five closings that resulted in more than $1 million being deposited into Settle One’s account from two lenders, Wells Fargo Bank and Live Well Financial.
Martin has more than 30 years experience covering local news in Westchester and Putnam counties, including a frequent focus on zoning and planning issues. He has been editor-in-chief of The Examiner since its inception in 2007. Read more from Martin’s editor-author bio here. Read Martin’s archived work here: https://www.theexaminernews.com/author/martin-wilbur2007/
