Architect Pleads Guilty to Florida Mortgage Fraud

Robert Policastro pleaded guilty this month in a Tampa federal courtroom to conspiring to commit mail and wire fraud related to mortgage fraud. Policastro, most recently a resident of Vienna, Austria, faces up to twenty years in federal prison and a fine of up to $18.1 million upon sentencing.

According to law enforcement, Policastro, who is an architect, conspired with a title agent to obtain over $9 million in mortgage loans from various lenders for the purchase of properties. The loans were generally obtained after Policastro directed the title agent to prepare “dueling” HUD-1 settlement statements for the different loan transactions.

The false HUD-1s failed to disclose to the lenders the existence of other lenders involved in financing the purchase of the properties. The statements generally included the false claim that Policastro had provided large down payments for the loans, when Policastro had, in reality, contributed no money and was making a profit from the deals.

For example, in September 2006, Policastro agreed to purchase a home for $1.6 million with the seller holding a second mortgage on the property for $600,000. Policastro directed the title agent to prepare two different HUD-1 statements. Based on a fraudulent HUD-1, the lender approved a loan for almost $1.5million to Policastro, on the condition that Policastro commit to the loan by putting $500,000 of his own money down. The lender was not aware that there was to be a second mortgage.

The seller ultimately suffered a $600,000 loss. The lender suffered an $800,000 loss on that transaction alone.

Policastro’s case was investigated and prosecuted as part of the U.S. Attorney’s office initiative against mortgage fraud in the Middle District of Florida.