Schenectady County

Notary sentenced for role in mortgage scam

An Altamont woman has been sentenced to serve four months of home detention for her role in a fraudu

An Altamont woman has been sentenced to serve four months of home detention for her role in a fraudulent mortgage scheme.

Karen Hewitt, 53, was also ordered to serve three years’ federal probation for her role as a notary in the scheme. She was the last of four to be sentenced when she appeared Tuesday in U.S. District Court.

Hewitt, a notary, pleaded guilty to one count of bank fraud last year. She was part of a property-flipping scheme organized by Michael Cassadei, a former city resident who was sentenced to serve more than two years in prison in December 2010.

Cassadei, of Galway, would obtain an inflated appraisal on properties he didn’t own, sell them, and then use this money to purchase it in cash from the original owner. He coordinated two separate closings for each property and arranged to file the deeds in reverse chronological order to mask any appearance of impropriety, according to prosecutors.

Hewitt acknowledged she engaged in various acts to aid this scheme while she worked at Affirmative Title and Abstract Company in Albany. She admitted to submitting documents purporting to issue title insurance on the properties when the chains of title were not clear.

Hewitt also prepared false documentation that failed to disclose the true nature of the transactions. This fraudulent documentation meant the lending bank — First Union Bank of Delaware — was unaware the loan proceeds would be used to purchase the properties that were simultaneously being flipped for thousands of dollars more than their true value.

Cassadei was also ordered to serve three years’ probation and pay $135,000 in restitution. He immediately paid $122,000 following his sentencing and forfeited roughly $13,000 in cash that was seized at the time of his arrest in 2009.

Also sentenced in the case were Elmer “Joe” McIndoo, 54, an appraiser who worked for Cassadei and served six months’ home detention after pleading guilty to one count of bank fraud.

Mary Fox Ianniello of Los Angeles, who submitted false loan applications in the case, was sentenced to time served and three years’ probation after admitting to bank fraud.

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