NORWALK, Conn. – A Norwalk man and his wife were sentenced Tuesday to serve time in federal prison for their roles in a Fairfield County mortgage fraud scheme, according to a press release from the United States Attorney for the District of Connecticut.
William A. Trudeau Jr., 50, was sentenced to 188 months in prison followed by five years of supervised release, Public Information Officer Thomas Carson said in the press release. His wife, Heather Bliss, 37, was sentenced to 30 months in prison, followed by three years of supervised release. She was also ordered to pay a fine of $12,500.
Trudeau was found guilty Oct. 9 of one count of conspiracy to commit bank fraud, mail fraud and wire fraud, and one count of wire fraud in a jury trial, Carson said. Bliss pleaded guilty July 30, 2010, to one count of conspiracy to commit wire fraud, Carson said.
Trudeau and Joseph Kriz, a real estate attorney in Wilton, formed Aspetuck Building & Development in 2004, Carson said. Trudeau, an unnamed principal in the business, Kriz and others intended to purchase, develop and sell properties, he said. Bliss was employed as a paralegal for Kriz and, in that capacity, had responsibility for preparing and maintaining all legal and bank documents related to real estate transactions handled by Kriz.
From approximately February 2004 to April 2010, Trudeau conspired with Bliss, Kriz, Fred Stevens, Thomas Preston and others to defraud federally insured financial institutions and mortgage lenders, Carson said. They obtained mortgages on various Fairfield County properties by submitting false information so they could develop and sell the properties for profit and to pay off debts owed to “hard money” lenders, from whom they had previously obtained high-interest loans, Carson said. The mortgages far exceeded their ability to repay the loans.
Bliss prepared and maintained numerous fraudulent mortgage documents involved in the scheme, Carson said. She also overstated her income when she applied for mortgages on her own behalf and applied for new mortgages within 60 days of receiving prior mortgages knowing that the earlier mortgage would not be revealed by her credit report.
Bliss also nominally owned Huntington South Associates LLC, a shell company that Trudeau used to pay for personal expenses and to secure loans fraudulently, Carson said. Bliss used mortgage funds that were wired into the shell company as her “business income” on mortgage loan applications, including a $1.3 million mortgage on a Westport property.
Trudeau could not own or operate a business that was not in his own name as a result of a 2003 federal conviction for fraud and tax offenses, Carson said. He was prohibited from incurring new credit charges or opening additional lines of credit without prior approval from the U.S. Probation Office, and he was required to release all of his financial information to the Probation Office. He also was ordered to pay more than $450,000 in restitution. Trudeau’s name did not appear on any documentation related to the loans or the properties for which the loans were obtained, Carson said. Money was hidden in bank accounts that were not in his name, in part to prevent the collection of his court-ordered restitution, Carson said.
Toward the end of the conspiracy, Trudeau obtained money from a private lender to complete construction on one of the properties, claiming falsely that he had a signed purchase contract for the property when he did not, Carson said. He used the money for other things, Carson said.
Trudeau and his co-conspirators fraudulently obtained more than $4 million in mortgage loans to purchase six properties in Westport and Newtown, Carson said. Mortgage lenders have lost more than $1.9 million.
Trudeau defrauded private lenders of a total of more than $1 million, and Kriz stole approximately $3.5 million from his IOLTA (Interest on Lawyers Trust Accounts) account, Carson said. More than $1.2 million of the stolen IOLTA account funds were deposited into the bank account of Huntington South Associates and used during the conspiracy, Carson said.
Trudeau and Bliss will be ordered to pay restitution of more than $4.2 million, Carson said.
Trudeau, whose criminal history includes approximately 13 felony convictions, has been detained since August 9, 2011, when his bond was revoked, Carson said.
Kriz, Stevens and Preston have pleaded guilty to charges related to their involvement in this scheme and await sentencing, Carson said.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, go to www.stopfraud.gov.