The president of a New York brokerage firm pleaded guilty on Monday to conspiracy in a $66 million mortgage fraud scheme -- the latest victory in U.S. President Barack Obama's campaign against financial fraud.
Gerard Canino, President of First Class Equities, pleaded guilty to one count of conspiracy to commit wire fraud and bank fraud in a New York federal court, said the U.S. Attorney's Office. The charge carries a maximum penalty of 30 years prison.
"As the president and owner of First Class Equities, Gerard Canino should have promoted responsible homeownership and protected the integrity of the mortgage finance industry," Manhattan U.S. Attorney Preet Bharara said in a statement.
"Instead, he used his firm to commit a massive mortgage fraud scheme that left scores of foreclosed properties in its wake. With today's plea, Canino now stands convicted for his role in this brazen scheme."
Canino's lawyer, Stuart Kaplan, described his client as "contrite and forthright in accepting his responsibility."
The U.S. Attorney's Office said Canino and his firm recruited " s traw buyers" - people who posed as home buyers to purchase distressed properties but who had no intention of paying the mortgages.
Instead, the bank loans to buy the properties were transferred to Canino and his co-conspirators. Court papers said the Long Island-based firm ran the fraud from 2004 to 2009.
Canino was charged last August, along with 13 others. The trial of his co-defendants is set to begin on July 2.
The case involved coordination with Obama's Financial Fraud Enforcement Task Force, which was created in 2009.
The case is U.S. v. Gerard Canino et al., U.S. District Court, Southern District of New York, No. 11-655.
