HARRISBURG, Pa. (Legal Newsline) - Pennsylvania Attorney General Linda Kelly announced on Monday that a multimillion dollar mortgage fraud lawsuit has resulted in judgments of more than $28 million for the victims of a Ponzi scheme.
Several mortgage consultants and employees of Personal Financial Management were found to have acted in concert with the company's president, Wesley Snyder, in the sale and marketing of loan participation agreements and wrap mortgages, according to WFMZ.
These agreements and mortgages were allegedly promoted as ways for consumers to lower their interest rates and pay down their mortgages faster, the report says.
The court found that Snyder, who remains in prison after pleading guilty to a federal count of mail fraud, engaged in deceptive conduct, violating the state's consumer protection law, the report says. The court jointly entered judgment against Snyder and his wife, Sydney, in the amount of $28,675,731 in victim restitution.
Former AG and current Gov. Tom Corbett filed the lawsuit in 2008.
"Consumers were drawn to OPFM and related companies with promises of lower interest rates, early pay-offs for their mortgages or higher returns for their investments," Corbett said when he filed the suit.
"In reality, the money from new loans and new investments was used to pay-off older accounts, conceal company losses and support OPFM until the entire scheme collapsed in late 2007."
In addition, the court found that five mortgage consultants for OPFM, along with the company's office manager and the company's bookkeeper, shared responsibility for the consumer losses, the report says.
Additionally, the court found that five mortgage consultants failed to properly inform consumers about the possible risks in the scheme, the report says.