CHICAGO (CN) – Two Chicago attorneys were sentenced to long prison terms and ordered to forfeit $4.7 million for a $5.5 million mortgage fraud, the U.S. Attorney’s Office said.
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Charles Murphy, 65, of Chicago, was sentenced to 6 years in federal prison and ordered to forfeit $2.4 million, and John Farano, 50, of Palos Park got 9 years and was ordered to forfeit $2.3 million.
Murphy was ordered to pay $651,000 in restitution and Farano to pay $1.3 million in restitution, though it was unclear from the U.S. attorney’s statement whether that would come from the forfeitures, or on top them.
Two other men were also sentenced.
After a 9-week trial, the attorneys were convicted of providing money to buy residential properties and paying kickbacks to Westwood Community Development, a nonprofit, to fraudulently buy about 40 homes in poor areas at a discount from the Department of Housing and Urban Development.
Westwood qualified for the discount by promising to sell the homes to poor people. But the Genesis Investment Group resold the homes to buyers “who were fraudulently qualified for financing based on false statements about their qualifications and false statements about the condition of the properties,” prosecutors said in the statement.
Trial evidence showed that the scam netted $5.45 million from 2002 to 2006.
Farano, who handled many of the real estate transactions for Genesis, has his law license suspended. Murphy surrendered his law license last week, prosecutors said.
Co-defendant Robert Brunt, 45, of Chicago, the president of Genesis, was sentenced to 12½ years in prison, and Tracey Scullark, 44, of Chicago, a Genesis sales agent, got 6½ years.