More than a year after Michael David Scott was charged with running a massive mortgage scam, the Mansfield developer works as a licensed broker selling distressed properties, raising concerns among other Massachusetts real estate professionals about his continued involvement in the industry.
Scott, 46, is awaiting trial after pleading not guilty in US District Court in Boston in 2010 to 68 charges related to allegations that he cheated mortgage lenders. The charges involve the sales of dozens of Dorchester and Roxbury condominiums between 2006 and 2008. Federal prosecutors say that he, two out-of-state recruiters, and others obtained funds to finance deals through “false and fraudulent pretenses’’ in a scam involving the conversion of multiple-family homes into condominiums, many of which went into foreclosure.
Meantime, Scott has started a new company, The Crawford Group LLC. On its website, he says the firm enjoys “a very high success rate with short sales.’’ A short sale allows a property owner to sell his home for less than what is owed on the mortgage, with approval from the lender.
Massachusetts law does not prohibit a real estate broker under criminal indictment from working while his case moves through the court system, but the state does have the power to suspend or revoke a license based on its own finding of wrongdoing.
Dan Rosenfeld, communications director for the state Office of Consumer Affairs and Business Regulation, which oversees licensing of brokers, said the state launched an investigation into Scott’s business practices shortly after the indictments were unveiled. Rosenfeld said the agency “voluntarily stayed our investigation not to risk creating complications for the criminal case,’’ which he called standard practice.
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