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“Wrap Around, Equity Slide Down Discount” Scheme Busted

72-Year-Old Broker Sentenced

Williamsport, Penn. - (July 2, 2008) Martin Carlson, United States Attorney for the Middle District of Pennsylvania, and Teresa Thome, Inspector-in-Charge, U.S. Postal inspection Service announced today that a Berks County man at the center of a multi-million dollar, mortgage fraud scheme has been sentenced to 12 years in prison and ordered to pay $29.2 million in restitution.

WESLEY A. SNYDER, age 72, of Oley, Pennsylvania, was sentenced to the 146 month term by U.S. District Court Judge Yvette Kane in Harrisburg. SNYDER pleaded guilty in November of last year to a one count Information charging him with Mail Fraud Affecting a Financial Institution, 18 U.S.C. § 1341. The Information alleged SNYDER defrauded more than 800 individuals throughout Central and Eastern Pennsylvania between 1988 and September of 2007 via his “Wrap Around, Equity Slide Down Discount” Mortgage Program and his “Mortgage Participation” Investment Program. According to the document SNYDER took in more than $65.6 million from his “Wrap Around” mortgage customers between 1988 and 2007 but only forwarded approximately $39.1 million of that amount to their lenders. The Information also alleged SNYDER defrauded 31 “Mortgage Participation” investors out of an additional $3,000,000. During today’s sentencing hearing Judge Kane found there were a total of 819 victims in the case and that together they suffered $29,267,080 in losses.

SNYDER filed for Chapter 7 bankruptcy on behalf of six Reading-based business entities he owned and operated, primarily under the names of Personal Financial Management and Image Masters, Inc., on September 18, 2007. SNYDER had notified more than 800 customers in Lancaster, Lebanon, Dauphin, Cumberland, York, Berks, and Schuylkill Counties a few days earlier that he could no longer make mortgage payments on their behalf. On October 12, 2007, U.S. Postal Inspectors from Harrisburg executed a search warrant at SNYDER’s residence. The Inspectors’ expeditious investigation culminated in the filing of the one count Information against SNYDER on November 9, 2007.

SNYDER pleaded guilty to the charge pursuant to a plea agreement which required him to cooperate with the government, disclose any and all assets, and make restitution to his victims. The agreement also froze SNYDER’s assets and prohibited him from selling, transferring, or otherwise disposing of any property without the express written consent of the U.S. Attorney’s Office. The agreement further required SNYDER to submit to interviews regarding his financial status and, if necessary, to undergo a polygraph examination to ensure his compliance.

Earlier this month, on June 3, 2008, Judge Kane approved a Property Surrender and Restitution Agreement executed by SNYDER, his wife, the Trustee for his bankrupt businesses, and the U.S. Attorney’s Office. The Agreement obligates SNYDER to surrender almost all of his few remaining assets to the Trustee, who is obligated to employ her best efforts to liquidate the property into an special fund solely for the benefit of SNYDER’s victims. Under the terms of the Agreement the Trustee may not charge any commissions or fees for her work or the work of her court- appointed counsel. The Agreement authorizes the Trustee to distribute the proceeds of the liquidated assets to the victims on a pro rata basis, as directed by Judge Kane in SNYDER’s Judgement of Conviction and Sentence.

Carlson stated: “Wesley Snyder’s crimes defrauded hundreds of people out of tens of millions of dollars. The financial dimensions of this crime are staggering, with literally hundreds of victims suffering individual losses of between $50,000 and $400,000. Throughout south central Pennsylvania, dozens of communities and hundreds of families have felt the devastating economic impact of this crime.”

“But the economic dimension of this crime is only one small aspect of this offense. Wesley Snyder’s crimes not only defrauded his victims of their money; these crimes stole from his victims an essential aspect of the American dream, the dream of safe, secure home ownership. Today’s sentence sends a powerful message to those who would defraud homeowners, and imperil the dream of home ownership–your crimes will be detected and those who threaten this aspect of the American dream face severe consequences for their crimes.”

Carlson praised the work of the Postal Inspectors on the case, noting that they quickly and efficiently investigated an extremely complex and sophisticated white collar fraud. Carlson also commended the assistance the Inspectors and his Office received from the PA Department of Banking and the PA Attorney General’s Office.

The case was prosecuted by Assistant U.S. Attorney Kim Douglas Daniel.

SOURCE: United States Attorney's Office
Middle District of Pennsylvania

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