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‘Incorrigible fraudster’ to serve 9 years for housing scam, tax evasion

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U.S. District Judge Michael P. Shea sentenced con man Timothy W. Burke to 9 years in prison Friday, saying the scheme in which Burke took in millions at the expense of financially troubled homeowners was one of the most serious white-collar crimes the judge had seen.

Shea went beyond the maximum eight-year prison term recommended under federal sentencing guidelines, in part he said because Burke, 65, previously had served three sentences, the longest for five years, for committing the same or similar crimes.

“Imagine, Mr. Burke, if you were robbed at gunpoint by someone who previously had received a relatively short sentence for the same crime. You’d be outraged,” Shea said.

Burke, described by victims as a charmer who would take them out to dinner, stop by their homes often and promise to relieve them of their underwater properties, would disappear as soon as the victims realized he had not fulfilled his promise, according to Assistant U.S. Attorney David T. Huang. Burke, described in sentencing documents as an “incorrigible fraudster,” used more than a dozen aliases to prevent his victims from learning his true identify and his criminal past.

Apologizing profusely to the court and victims, Burke said he had a lot of time to think about his actions while staring at the walls at the Donald W. Wyatt detention facility in Central Falls, R.I. He was arrested in November 2015 and in January 2016 pleaded guilty to mail fraud and tax evasion. He said his business was “flawed and unsound,” but he hadn’t set out to hurt anyone. He said of the more than $1 million in taxes that he had failed to report that he was waiting until he could make a good deal with the IRS, presumably under an amnesty program.

“I gave them false hope,” he said of the victims, several of whom attended the sentencing hearing in Hartford and addressed the court. “I was a light at the end of the tunnel and I closed that light off.”

He said he was eager to get out of prison, begin working at a legitimate job and repay the victims. The judge ordered three years of supervised release, imposed a long list of prohibitions designed to keep Burke from reoffending and ordered he repay the victims first, then the government. Shea didn’t give the victims false hope, though; he said that in many cases, defendants are never able to repay their victims.

Burke’s public defender, James P. Maguire, asked the judge to impose a sentence of five years in prison, then impose strict conditions of probation, including that Burke never work in the real estate or mortgage industries again, be prohibited from gambling and only be allowed to open bank or credit accounts with the permission of his probation officer. Also, Maguire recommended that the court order a mandatory psychological evaluation of Burke so that he could receive needed treatment. 

Burke had grown up in Preston and moved to Bridgeport after his parents divorced, according to testimony. He hoped to go to medical school but started drinking excessively during college and his grades suffered. He worked in the medical field for years, then went into real estate.

Burke and his attorney, Bradford Barneys, were the subject of a series of stories published by The Day beginning in November 2014. The scheme involved homeowners in Bridgeport, New London, Griswold, Ledyard, Waterbury, Plymouth, Portland, Andover, New Haven and West Haven. The Day’s investigation found more than a half-dozen cases in which Burke and his associates sent out mass mailings to people whose homes were in foreclosure, then allegedly bilked them out of thousands of dollars after promising to purchase their homes and free them of their mortgages.

The government launched its own investigation and determined that between 2010 and November 2015, Burke engaged in a scheme to defraud individuals, mortgage lenders and the U.S. Department of Housing and Urban Development by falsely representing to homeowners who were in, or facing, foreclosure on their homes that he would purchase their homes and pay off their mortgages.

The distressed homeowners agreed to sign various documents, including quitclaim deeds, indemnification agreements, management agreements and third-party authorization letters, which Burke presented to them on the understanding that, by signing the documents, they would be able to walk away from their homes without the burdens of their mortgage or other costs associated with home ownership.

The government found that Burke told homeowners that the process of negotiating with the lenders can take time and that, in the meantime, to ignore any notices regarding foreclosure. After he gained control of these houses, Burke rented out the properties to tenants by advertising the properties on craigslist.com and other means and falsely representing to tenants that he owned the properties.

Burke or one of his agents then collected rent from tenants, and Burke used the funds for his own benefit, according to the government. He liked to deal in cash and structured his bank deposits to avoid making mandatory government disclosures, according to testimony. He failed to negotiate with the homeowners’ mortgage lenders and failed to pay expenses associated with the homes, including the mortgages and property taxes, and he failed to pay any rental income he was collecting to the homeowners. Many of the properties ultimately were foreclosed upon by the mortgage lenders.

Burke went to great lengths to disguise his true identity through the use of more than a dozen aliases, including Pat Riley, Jim Caldwell, Jim Saunders and M. Soler, to conceal the sources of and expenditures from his criminal proceedings. He has been associated with multiple business entities, including Birmingham Investments LLC; Saunders Associates; New Haven Investments; Realty Partners Group; Preston Associates II; Turnkey Construction Services LLC; The Complete Handyman LLC; and Woodbridge Associates.

One victim, Kendra Jones, said she had traveled all the way from South Carolina to attend the sentencing. A single mother of two children, she was living in Bridgeport when she lost her job at Cablevision and was forced to file for bankruptcy. Her condominium was being foreclosed, and one day in 2013 she called the number on a card that had been left on her door by a company that claimed it would take over her mortgage.

She met Burke and was comforted that he was working with an attorney, Barneys, she said. But by 2013, she started getting calls and letters from attorneys and learned that there were tenants in her condominium and she still was incurring condominium fees. She said she contacted attorneys, who told her it sounded like she’d been scammed.

Burke resigned as the “property manager” of her condo and said the tenant would pay her directly, but she never received a dime, Jones said.

“The last message I left on his phone was that he’s going to pay for this. I didn’t know how, but he would,” she said in the courthouse hallway during a recess. “And today’s the day.”

Barneys, who also was charged in the scheme, has pleaded guilty and is awaiting sentencing.

k.florin@theday.com

Article source: http://www.theday.com/policefirecourts/20170428/incorrigible-fraudster-to-serve-9-years-for-housing-scam-tax-evasion

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