N.H. man gets prison in $2m real estate fraud

Scheme precipitated string of foreclosures

A New Hampshire man was sentenced to four years in prison for spearheading a real estate scheme that cheated homeowners and lenders out of more than $2 million and led to a string of foreclosures in the Boston area, Attorney General Martha Coakley said yesterday.

Joshua Brown, 31, was sentenced last week by Judge Raymond Brassard, following a three-week jury trial in Suffolk Superior Court that included more than 40 witnesses. Brown was convicted on charges that included larceny, making false or exaggerated statements, and falsifying documents.

In addition to the prison time, Brown faces 35 years of probation after his release and must pay $5 million in restitution.

His lawyer, Carmine Lepore, declined to comment.

“This sentence brings closure to a scheme that corrupted every aspect of the real estate industry at the expense of lenders, home buyers, and communities in Boston,’’ Coakley said in a prepared statement.

Five codefendants, including several mortgage brokers and a former lawyer, previously pleaded guilty in the case, which resulted in more than two dozen properties being abandoned and neglected, most of them in Chelsea, Dorchester, and East Boston.

According to prosecutors, Brown led Boston Equity Investments, which purported to specialize in real estate investment, although none of its employees were licensed real estate brokers.

The firm claimed to help people purchase properties, rent them out, and then sell them at a profit. Its employees sought out owners whose buildings had been languishing on the real estate market and offered to sell them at discount prices, prosecutors said.

Brown and the others worked to create inflated appraisals and fraudulent sales agreements that allowed them to collect tens of thousands of dollars in profits from each sale, officials said. They also worked with mortgage brokers to obtain financing for the purchase of the homes, using false information about buyers’ incomes, the attorney general’s office said.

Following the sales, homeowners were left with properties worth less than their loans, leading to damaged personal credit ratings.

All of the properties were seized by banks or sold at a significant loss, prosecutors said.