A former Somerville real estate attorney has pleaded guilty to making false statements on mortgage applications and using the funds secured from the loans for his own purposes, rather than paying off existing loans as directed by the new lenders, according to Attorney General Martha Coakley’s office.
Kevin Carey, 49, of Middleborough, worked as a real estate lawyer in Somerville and Medford and was involved in a mortgage stacking on four residential properties he or his family members owned.
The scheme involved serially refinancing the loans on these properties, without paying off the existing loans. Carey was also the agent for a New England title insurance company which allowed him to issue title insurance policies on mortgage transactions he processed.
Between April 2002 through September 2004, Carey worked as closing attorney on mortgage loans on several properties. Carey "stacked" three mortgages on a home in Medford, two mortgages each on two different properties in Everett, and one mortgage on his home in Medford.
Carey also falsified information on mortgage loan applications by omitting certain mortgages on the various properties, and also signed a family member’s name on false mortgage applications and closing documents he created.
When he received the proceeds of the loans, Carey did not pay off the existing mortgages on these properties, but rather used the funds for his own benefit. Carey issued title insurance policies or commitments in connection with the transactions, and the lenders were therefore protected, but ultimately the title insurance company suffered the financial loss.
As a result of this scheme, Carey stole more than $2 million, Coakley said.
The lenders remained unaware of the problem because Carey continued to make monthly payments on all of the loans. In November 2005, a database search by Fannie Mae flagged the multiple mortgages on one of the properties, triggering a notification to one of the lenders. The lender then notified the title insurance company of the problem. Lawyers for the title insurance company then referred the matter to the attorney general’s office in March 2006.
Carey pleaded guilty yesterday in Woburn’s Middlesex Superior Court to eight counts of larceny over $250 and seven counts of willfully making a false statement regarding financial condition or assets. He is scheduled to be sentenced on Nov. 6 in Bristol Superior Court.
