Merrick man gets 8 years for $66M mortgage fraud

A federal judge has sentenced Gerard Canino, 51, of Merrick, to an eight-year prison term for leading a $66 million mortgage fraud scheme, according to the U.S. attorney for the Southern District of New York.

Canino’s sentencing took place in Manhattan last month. As president of First Class Equities, a mortgage brokerage firm with offices in Oceanside and Old Westbury, Canino conspired with others between 2004 and 2009 to defraud millions of dollars from mortgage lenders via a scheme that involved “straw buyers” purchasing homes from unsuspecting homeowners, often ones in financial distress.

The straw buyers posed as legitimate homebuyers, though they did not intend to pay for or live in the houses. They then submitted mortgage applications to banks and lenders with false information about their finances and desire to live in the houses. After lenders approved the applications and paid mortgage proceeds to attorneys for the straw buyers, the attorneys, who also participated in the scheme, distributed the proceeds to Canino and his co-conspirators. The attorneys then lied on written statements about how they had distributed the proceeds.

Canino pleaded guilty in April 2012 to conspiracy to commit wire and bank fraud. On May 22 this year, Robert Patterson, a judge for the U.S. District Court for the Southern District of New York, sentenced Canino to 97 months in prison and three years of supervised release following his term, and ordered him to forfeit to the government the proceeds of his crime and make full restitution to his victims.

Among the others sentenced by Patterson were real estate attorneys Michael Schlussel, Michael Raphan and Neal Sultzer, who will serve 46, 36 and 24 months, respectively, and FCE loan officers James Vignola and Omar Guzman, who received sentences of 13 months and one year, respectively.