Mortgage fraud nets 10-year prison term

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To the end, Denise Bonfilio didn't think she did much of anything wrong by renovating Sewickley-area homes using bank loans gained through fraud.

"I can't tell you how many lawyers were involved in this thing, and nobody ever said, 'No, you can't do this,' " the 56-year-old Sewickley Hills woman told U.S. District Judge Joy Flowers Conti. As to the banks that lost $2.22 million on her projects: "I don't know how they were deceived. I honestly don't."

Judge Conti, though, sentenced her to 10 years in prison, noting that the facts were laid out at a 2012 trial in which a jury found her guilty of eight counts of wire fraud and one count of money laundering.

Judge Conti said Bonfilio fell prey to "greed to live a lifestyle that wasn't commensurate with the earnings capacity" from the house-flipping business. That led to a succession of outsized loans obtained through fraudulent mortgage documents that exaggerated the values and sale prices of homes.

Much of the daylong sentencing hearing dealt with the amount lost by Bonfilio's victims.

The banks lost $2.22 million and tiny Bell Acres Borough had to pay $9,100 to demolish a home Bonfilio left unfinished. But what about her private investors -- termed by both the defense and prosecution as unindicted co-conspirators -- who claimed that she cost them $500,000?

Assistant U.S. attorney James Garrett said there were really two sets of crimes: the entire group's fraud against banks, and Bonfilio's fraud against her co-conspirators.

"I've never heard of such a thing," said defense attorney Alexander Lindsay, a former prosecutor.

In reality, Mr. Lindsay said, Bonfilio was in court taking the blame only because her former friends decided to point the finger at her.

"The way it works, in reality, is it's a game of musical chairs in terms of who's going to testify for the government first," he said. "She then becomes solely responsible for [the fraud] because when the music stops, she's the one left" without a cooperation agreement.

Judge Conti also ordered Bonfilio to pay $2.22 million in restitution, but did not hold her responsible for the losses of her co-conspirators.

Bonfilio, a former tennis teacher and forest firefighter, gave a kidney to her former girlfriend and business partner, Deborah Kitay. Kitay was sentenced to 18 months in prison for wire fraud, and testified against Bonfilio.

Bonfilio said that some of the testimony against her at trial falsely accused her of plotting fraudulent deals on days when she was in the hospital following the kidney donation. "My biggest regret is not testifying at my own trial," she said.

She and Mr. Lindsay said they will appeal the trial verdict.


Rich Lord: rlord@post-gazette.com , 412-263-1542, or on Twitter @richelord. First Published January 24, 2014 4:52 PM

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