CLEVELAND -- A federal judge today sentenced two major players in one of the country's largest mortgage fraud schemes to lengthy prison terms.
Tony Viola, a real estate company owner from Cleveland Heights, got more than 12 years in federal prison while real estate owner Uri Gofman of Beachwood received a term of more than 8 years.
A federal jury convicted Viola and Gofman of helping orchestrate a plan to rip off more than $3 million from sub-prime mortgage lenders through the sale of 34 homes. Gofman later pleaded guilty to additional charges.
Viola now heads to state court where Cuyahoga County prosecutors have charged him with running a similar scheme involving 453 houses that cost lenders more than $30 million.
Gofman has already pleaded guilty in state court for his role in the scheme and will testify against Viola.
Most of the houses went into foreclosure, contributing to the housing crisis that has stricken Cuyahoga County.
U.S. Attorney Steven Dettelbach said the two received serious time for a serious crime.
"There are areas in our hometown of Cleveland where you used to be able to see kids playing in the street, people trying to make the American dream," said Dettelbach. "Those neighborhoods are desolated now with boarded-up home after boarded-up home."
Standing before U.S. District Court Judge Donald Nugent today, Viola maintained his innocence, saying he relied on faulty legal advice when the deals were made.
"At no time did I think I did anything wrong," said Viola. "I've always had a respect for the legal system and obviously I thought I would have had a different result."
Nugent said it appeared the whole sub-prime system was ripe for abuse, but it did not mean Viola was not guilty.
"The evidence in his case is pretty powerful that you were intricately involved," said Nugent. "Just because somebody else is responsible doesn't mean that you're not responsible as well."
Gofman, meanwhile, told the judge that he was "remorseful in every sense of the word."
"My actions have contributed to the economic devastation of the community," Gofman said. "I never set out to defraud anyone. I had a lot of houses to sell and I agreed to whatever ... was proposed."