By Michael Hinkelman, Philadelphia Daily News
Feb. 10--A Doylestown lawyer admitted his guilt yesterday in federal court in connection with a $14.6 million mortgage-fraud scheme that victimized 35 homeowners from fall 2004 to June 2007.
Stephen G. Doherty, 43, pleaded guilty to 15 counts of conspiracy, wire fraud and related bankruptcy and money-laundering offenses. U.S. District Judge Mary McLaughlin set sentencing for May 24.
The government alleged that Doherty and four others targeted homeowners facing foreclosure, promised to help them save their homes, engaged in real-estate transactions with straw purchasers and obtained dozens of bogus mortgages.
Authorities said most of the victims did not ultimately lose their homes in the scheme. Doherty, a bankruptcy lawyer, admitted involvement with four mortgage scams involving homeowners in Chalfont, Quakertown, Perkasie and Lumberville. The Perkasie and Lumberville homeowners were clients of Doherty.
In fall 2004, Doherty mailed advertisements to distressed homeowners and referred respondents to co-defendant Edward McCusker, who owned a mortgage company. McCusker, who has pleaded not guilty in the case, allegedly told homeowners he could save their homes by getting a mortgage in someone else's name for a year, while they leased the house back at a rent they could afford.
Instead, court papers said McCusker, of New Hope, arranged for the homeowner's residence to be transferred to a straw purchaser, used fake documents to obtain a mortgage in the name of the straw purchaser and took proceeds of sales for himself and co-defendants.
The plea memo said that Doherty and his partner, Jeffrey Bennett, received an initial referral fee of $1,500 per mortgage, later increased to 2 percent of the loan proceeds. The fee wasn't disclosed on the settlement form as being paid to Doherty and Bennett, the plea memo said, to conceal incentive payments the law firm was receiving to steer homeowners to McCusker.
When Doherty referred some homeowners to McCusker, he would file bankruptcy papers -- not intending to actually proceed with bankruptcy -- to delay the sheriff's sale so that the sale to the straw purchaser could go through, the memo said.
When financing was obtained, Doherty dismissed the bankruptcy petition a day before closing, the plea memo said. Doherty is free on $100,000 unsecured bond pending sentencing. Three other defendants in the case -- including McCusker's wife; Jacqueline, of New Hope; Bennett, of Springfield, and John Bariana, of Mullica Hill, N.J. -- have also pleaded not guilty.
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