A Rhode Island attorney faces as much as seventy years in prison after pleading guilty to charges he operated a mortgage Ponzi scheme that duped clients out of hundreds of thousands of dollars. David L. Spector, of Needham, Rhode Island, pled guilty to three counts of wire fraud and one count of money laundering in connection with the scheme, having previously surrendered his license to practice law. In addition to the prison sentence, Spector also faces up to $1 million in criminal monetary penalties.
According to authorities, Spector conducted real estate closings between April 2007 and August 2007 for properties in Massachusetts and Rhode Island. As is customary, Spector had funds transferred from the proceeds of mortgages obtained by his clients to his attorney escrow account, which were to be used to pay off existing mortgages and other closing costs. Instead, Spector used these proceeds for personal expenses and to pay off mortgages from previous closings that he had failed to pay off. Spector was able to conceal his wrongdoing by filing change-of-address forms so that mortgage bills for the unpaid mortgages would be sent to a post office box that he controlled.
Spector is scheduled to be sentenced August 8, 2012. He may also be ordered to pay restitution to his victims.