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ANDOVER COUPLE PLEAD GUILTY TO LAND FLIP SCHEME

 ANDOVER COUPLE PLEAD GUILTY TO LAND FLIP SCHEME
 BOSTON, June 26 /PRNewswire/ -- An Andover couple pleaded guilty


today for their role in a scheme to commit ten land flips on the North Shore.
 U.S. Attorney A. John Pappalardo announced that Mark Lunardo, 33, and his wife, Gina Lunardo, 31, both of Andover, Mass., pleaded guilty to an eight count Indictment charging them with violating the federal wire fraud statute. The wire fraud statute makes it a crime to undertake a scheme to defraud, and to use interstate wire communications, i.e. telephones and facsimile transmissions, in furtherance of the illicit scheme.
 The Indictment to which the Lunardo's pleaded guilty charged that they along with others, devised a scheme to defraud mortgage companies by obtaining mortgages on 10 properties on the North Shore for amounts greatly in excess of the true market value of those properties. The Indictment also charged William W. Lilly, and an appraiser, Robert O'Connor for their role in the same wire fraud scheme. Lilly and O'Connor are awaiting trial. A Swampscott couple, Barry and Diana Tevrow pleaded guilty in January for their role in the scheme.
 In federal court today, an Assistant U.S. Attorney told Federal District Court Judge Robert E. Keeton that if the case against the Lunardo's had gone to trial the evidence would have shown that the co-schemers orchestrated a series of purchases and sales of the property within a short period of time, often on the same day ("flipping the property"), and then received mortgage financing on the final purchase of the property.
 According to the prosecutor, the scheme worked as follows. The Tevrow's and Lilly would locate the property to be flipped, would arrange for "straw" buyers (allowing the properties to be flipped), and would locate ultimate buyers for the property. The ultimate buyers of the properties would then be directed to the Lunardo's who operated a mortgage origination firm named USA-1
Financial Services, Inc. USA-1 had a correspondent relationship with a number of large national mortgage lenders. The co-schemers would then prepare fraudulent mortgage applications for the buyers and inflated appraisals of the properties and submit those documents to lenders.
 The lenders would finance 80 percent of the inflated purchase price. The ultimate buyer would close on the loan and assume the mortgage. After obtaining the financing, the co-schemers would divide their illicit profit, i.e. the amount by which the loan exceeded the fair market value of the
property. In total, the co- schemers arranged for mortgages in excess of $2.3 million.
 Judge Keeton set the Lunardos' sentencing for Oct. 30, 1992. The Lunardos each face a maximum penalty of five years imprisonment and a $250,000 fine on each of the eight counts of the Indictment.
 This case was investigated by Special Agents of the Boston office of the Federal Bureau of Investigation and of the Office of the Inspector General of the Resolution Trust Corporation. The case is being prosecuted by Assistant U.S. Attorney Lon F. Povich of Pappalardo's Economic Crimes Unit.
 -0- 6/26/92
 /CONTACT: Press Officer, U.S. Attorney's Office, 617-223-9445/ CO: ST: Massachusetts IN: SU:


TM -- NE009 -- 4342 06/26/92 16:25 EDT
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Date:Jun 26, 1992
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