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CHICOPEE ATTORNEY PAYS CIVIL PENALTY IN SETTLEMENT OF GOVERNMENT'S BANK FRAUD CHARGES

 CHICOPEE ATTORNEY PAYS CIVIL PENALTY
 IN SETTLEMENT OF GOVERNMENT'S BANK FRAUD CHARGES
 BOSTON, Oct. 26 /PRNewswire/ -- U.S. Attorney A. John Pappalardo today announced that Chicopee attorney Robert Eastwood has paid a $30,000 civil penalty in settlement of the government's claims arising from Eastwood's role in a bank fraud scheme involving hidden second mortgages.
 The government claimed that during late 1990 and early 1991, Eastwood was an officer of Aldenview Development Corporation ("Aldenview"), a real estate development company run by Raymond Authier ("Authier"), also of Chicopee. Also during that period, Eastwood acted as closing attorney for The Chicopee Savings Bank on certain mortgage loans issued by the bank. On two occasions, Aldenview and Authier sold condominiums in Chicopee to buyers in their late teens and early twenties, and Chicopee Savings agreed to provide the primary mortgage loans for the purchases. As part of its agreements with the buyers, Aldenview offered to take back second mortgages in lieu of cash payments, as a means of paying the difference between the Chicopee Savings loan amount and the purchase price for the units.
 Eastwood, as closing attorney for Chicopee Savings on the loans, unlawfully concealed the second mortgages from Chicopee Savings through the use of falsified closing documents and affidavits. The Chicopee Savings loans were issued pursuant to the Massachusetts Housing Finance Agency ("MHFA") subsidized loan program. Under MHFA rules and regulations, Chicopee Savings could not have issued first mortgages to the buyers had it known of the second mortgages to Aldenview.
 As announced last month, Aldenview and Authier have paid $20,000 in settlement of the government's claims arising from the same transactions.
 In the absence of a settlement, the United States intended to prosecute its action against Eastwood under the civil penalty provisions of Section 951 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). Congress enacted Section 951 of FIRREA as an additional means of fighting financial institution fraud. Under the statute, the government may seek civil penalties as an alternative to, or in addition to, any criminal sanctions for certain enumerated financial institution fraud violations.
 This action is being handled by Assistant United States Attorney David Abelman of Pappalardo's Civil Division.
 -0- 10/26/92
 /CONTACT: Press office of the U.S. Attorney, 617-223-9445/


DH -- NE023 -- 4933 10/26/92 14:50 EST
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Publication:PR Newswire
Date:Oct 26, 1992
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