Palos Park lawyer sentenced for mortgage fraud
By Mike Nolan email@example.com July 12, 2012 1:52PM
Updated: August 14, 2012 6:28AM
A Palos Park attorney has been sentenced to nine years in prison and ordered to pay more than $1.3 million in restitution following his conviction last year for taking part in a multimillion-dollar mortgage fraud scheme, the U.S. attorney’s office in Chicago said Thursday.
John Farano, whose law license has been suspended, was also ordered to forfeit more than $2.3 million, according to a news release from the U.S. attorney’s office.
Farano, 50, and three other people were convicted of multiple counts of mail and wire fraud last December following a nine-week trial. The four netted about $5.45 million in fraudulently obtained mortgage loans, and the scheme involved paying kickbacks to a nonprofit organization to obtain some of the properties at a discount from the U.S. Department of Housing and Urban Development, the U.S. attorney’s office said.
The scheme involved at least 40 residential properties, primarily located in Chicago’s Englewood community, according to the news release.
Farano and another attorney, Charles Murphy, of Chicago, put up money to buy residences knowing they’d earn a profit from the fraudulently obtained mortgages, the U.S. attorney said.
Farano, who was sentenced Wednesday, was convicted of four counts of mail and wire fraud and five counts of theft of government funds, and is scheduled to begin serving his sentence Sept. 10, the U.S. attorney said.
During the trial, federal prosecutors said the scheme involved buying homes that needed extensive repairs and which were located in economically-depressed neighborhoods. Homes were bought using straw buyers and properties were resold at grossly inflated prices, often with little actual repair work being done on the homes, the government said.
Others sentenced Wednesday were Robert Brunt, of Chicago, who was president of Genesis Investment Group, and Tracey Scullark, of Chicago, a sales agent for Genesis. Brunt was sentenced to 121/2 years in prison and Scullark received 61/2 years. They were ordered to pay more than $1.6 million in restitution and forfeit $4.2 million in proceeds.
Farano — whose firm concentrates in criminal defense, personal injury and real estate — handled real estate closings in the fraudulent deals for Genesis, the government said. The lawyer also operated Big Dog Holdings, BD Financial Group and Capital Acquisitions, which provided the upfront money to buy the distressed properties, the government said.