Four Merokeans indicted in $58M fraud

Four Merrick men have been charged with bank and wire fraud for their alleged roles in a mortgage scheme that involved more than 100 home loans valued at over $58 million. The fraud allegedly took place over five years, from 2004 to 2009.

According to an indictment filed by the U.S. Attorney’s Office of the Southern District of New York and the New York office of the FBI, the men took part in the scheme while employed by the mortgage brokerage firm First Class Equities, which has offices in Oceanside and Westbury.

Among the indicted were Gerard Canino, 50, owner and president of First Class Equities, Robert Thornton, 64, Michael Schlussel, 50, and Ralph Delgiorno, 38, all of whom are from Merrick. A total of 14 people were arrested.

The indictment alleges that the defendants deceived homeowners, banks and lenders by falsifying personal and financial information and other legal documents to obtain mortgage loans on homes that “straw buyers” purchased from financially distressed homeowners, and then disbursed the proceeds among themselves. They later allowed the properties to fall into foreclosure, and kept the loan proceeds.

If convicted, Canino could face up to 90 years in prison and a $3 million fine. The other three Merrick men face up to 30 years in prison and fines of $1 million each.

“As alleged, this brazen and wide-ranging scheme defrauded banks and lenders of millions and enriched its participants, including real-estate professionals who took advantage of their inside knowledge of the system to fleece it,” said Preet Bharara, the U.S. attorney for the Southern District of New York.

According to a spokesperson for the FBI, the investigation of First Class Equities began in March 2010, with the years 2004 through 2009 being the point of focus. The spokesperson also said that First Class Equities first registered itself as a mortgage brokerage firm in 1988.