Dentist Sentenced to 120 Months in Prison for Multi-Million Dollar Mortgage Fraud

TRENTON – A former Staten Island, N.Y., dentist, who maintained an office in Berlin Township, was sentenced to 120 months in federal prison today for operating a scheme in which he fraudulently obtained approximately $2.76 million in mortgage loans, and spent the proceeds on luxury items including the purchase of a 46-foot yacht, a North Carolina residence and a GMC Yukon Denali, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Freda L. Wolfson also ordered Terrance D. Stradford, 48, a.k.a. “Wayne Sellers,” to pay $592,000 in restitution. Additionally, Judge Wolfson entered a $720,000 criminal forfeiture judgment against the defendant, which the government sought as proceeds derived from the scheme.

On Sept. 26, 2007, after less than two hours of deliberations, a jury convicted Stradford of all 24 counts contained in a Superseding Indictment. Stradford was convicted on one count each of conspiracy to commit wire fraud, conspiracy to commit money laundering and tax evasion. Stradford was also convicted of three counts of wire fraud and 18 counts of money laundering.

During the trial, the jury heard the testimony of more than twenty witnesses and viewed hundreds of pieces of evidence regarding the scheme operated by Stradford. The jury heard how Stradford and others used fraudulent documents, made false statements, and established fictitious companies and opened back accounts in various company names to fraudulently obtain mortgages secured by a property at 412-414 Commerce Lane in Berlin Township (the“Commerce Lane property”).

At the trial, the government presented evidence that in October 1999, Stradford formed a limited liability company called 412-414 Commerce Lane, LLC (“412-414 LLC”). In December 1999, Stradford, acting through 412-414 LLC, purchased the Commerce Lane property for $337,500 with a first mortgage in the amount of $310,000 held by American Business Credit Inc. (the “ABC Mortgage”). In September 2002, Stradford encumbered the Commerce Lane property with a second mortgage in the amount of $244,756 (the “M.W. Mortgage”).

The evidence presented to the jury showed that in June 2004, Stradford used the Commerce Lane property as collateral for a $500,000 mortgage loan from Quantum Corporate Funding, Ltd., (“Quantum”). In obtaining the loan, Stradford provided fraudulent documents to Quantum, including income tax returns containing a fake social security number and a commitment for title insurance which falsely indicated that there were no current mortgages on the Commerce Lane property. According to the Indictment, Stradford and Christina Hachadoorian, 36, of Willingboro, spent the proceeds of the Quantum loan on themselves, which included the June 2004 purchase of a 1998 Maxum 46' yacht using the aliases “Wayne Sellers” and “Christian Hachadoorian.” Hachadoorian previously pleaded guilty to conspiracy to commit money laundering and testified as a government witness at the trial.

In furtherance of the scheme, the defendants created a fictitious title company named Burlington Title Agency, LLC, and opened bank accounts in the names of Burlington Title Agency, LLC, A.B.C., LLC, and Commonwealth Medical Supply, LLC, in July 2004.

In August 2004, Stradford used the Commerce Lane property as collateral for a $585,000 mortgage loan from Eastern Savings Bank (the “Eastern loan”). The proceeds of the loan were purportedly to be used for the refinancing of the ABC mortgage and the purchase of medical equipment from Commonwealth Medical Supply. The jury found that the defendants provided fraudulent documents to Eastern Savings Bank, including title insurance commitment documents purportedly from Burlington Title Agency that falsely indicated the only mortgage on the Commerce Lane property was a mortgage held by American Business Company, when in fact, American Business Credit, Inc., was the actual issuer of the ABC mortgage and both the ABC mortgage and the M.W. mortgage remained as liens on the Commerce Lane property.

At closing, Eastern Savings Bank disbursed the loan proceeds to accounts in the names of Burlington Title Agency, A.B.C., LLC, and Commonwealth Medical Supply, which were, unbeknownst to Eastern Savings Bank, controlled by the defendants. The jury found the defendants spent the proceeds of the Eastern loan on themselves, including the August 2004 cash purchase of a $640,000 waterfront property in Belmont, N.C.

In September 2004, the defendants repeated the scheme to obtain a $275,000 mortgage loan from
Asset Funding Group, LLC. At closing, the loan proceeds were wire transferred into the Burlington Title Agency account. The defendants spent the funds on themselves, which included the purchase a 2005 GMC Yukon Denali.

In addition to the $1.36 million in loans at issue in the Superseding Indictment, at sentencing, Judge Wolfson held the defendant responsible for an additional $1.4 million in fraudulentlyobtained loans. These included a $595,000 loan that Stradford fraudulently obtained from GE Capital, which Stradford had represented would be used to purchase medical equipment for his dental practice, as well as two mortgages obtained from Countywide Home Loans, in which Stradford fraudulently represented that he had sold certain properties to his father.

In determining the actual sentence, Judge Wolfson consulted the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and
characteristics of the offense, the defendant's criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence. Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.

Christie credited Special Agents of the FBI Cherry Hill Resident Agency, under the direction of Special Agent in Charge Janice K. Fedarck in Philadelphia, and the IRS Criminal Investigation, under the direction of Special Agent in Charge William Offord, for the investigation of the case. The government is represented by Assistant U.S. Attorney Eric M. Schweiker of the U.S. Attorney’s Office’s Criminal Division in Trenton.

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Defense Attorney: Bruce Throckmorton, Esq., Trenton

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