Four people pleaded guilty to mortgage-related fraud in a Downtown courtroom Thursday, but the apparent target of the investigation maintained his innocence, saying the banks should be blamed for the foreclosures that rocked the global economy.
Federal prosecutors three weeks ago leveled charges against former officers of Great American Equity Mortgage, accusing them of falsifying borrowers' assets, obtaining inflated appraisals, faking down payments and otherwise lying to get loans for clients from 2002 through mid-2008.
Admitting their guilt to conspiracy to commit wire fraud and bank fraud were former Great American loan officers Carl Dorman, 52, of Canonsburg; Michelle Barone, 45, of Lady Lake, Fla.; Aaron J. D'Alessandro, 33, of Aliquippa; and Blaine Johnston, 31, of Brookline. Each admitted to involvement in between $200,000 and $400,000 in fraudulent loans.
All face sentencing Sept. 15, and federal guidelines suggest they could face upwards of two years in prison.
Assistant U.S. attorney Brendan Conway said that all four worked under Richard Stromberg, who was the owner of Great American.
"Mr. Stromberg was sort of a cut-and-paste specialist," Mr. Conway told U.S. District Judge Donetta Ambrose, accusing that defendant of altering documents that were then submitted to banks to win loan approvals.
Mr. Stromberg, 49, of Bethel Park, has pleaded not guilty to the indictment against him.
"I think it's sad that folks have lost homes," Mr. Stromberg said in a phone interview. "I've lost my home. I really don't think any mortgage broker in Western Pennsylvania's intent was ever to have people lose their homes. I think that part of it is very sad."
He blamed the banks, saying that before 2008 they "got extremely aggressive" with their loan products, including the so-called stated income loans in which verification of earnings was optional.
"I didn't create the stated income program," he said. "It wasn't my idea. ... To have us targeted as the reason why people lost homes, I'm not sure how fair that is."
Now an energy procurement consultant, Mr. Stromberg said he had not arranged a mortgage since 2008.
Mr. Conway opted not to respond to Mr. Stromberg's comments.
The prosecutor said that the FBI and the U.S. Secret Service conducted the investigation leading to the charges.
The agencies are part of a Western Pennsylvania mortgage fraud task force that has driven the filing of 144 lending-related criminal cases in the region.
Rich Lord: firstname.lastname@example.org, 412-263-1542 or on Twitter @richelord.