Two Long Island attorneys have been indicted for allegedly bilking homeowners, lenders and others out of more than $1 million in a mortgage fraud scheme between October 2008 and May 2010.
Attorneys Kenneth B. Schwartz of Huntington and Helene Stetch of Lindenhurst were hit with a 28-count indictment from a Queens grand jury that included charges of second- and third-degree grand larceny. The pair pleaded not guilty during arraignments Thursday and were released on their own recognizance.
Stetch worked with Schwartz at his Carle Place firm until she was terminated in mid-2010, according to a Queens District Attorney press release.
In a statement, Queens District Attorney Richard Brown said the pair “are accused of creating a financial nightmare for the buyers and the sellers of nearly half a dozen Queens properties. … Homeowners were allegedly deceived into selling their property, believing that the underlying mortgages would be satisfied, and buyers and new mortgage lenders were allegedly deceived into believing that the purchased properties were free and clear of prior encumbrances when, in fact, the mortgages were still outstanding.”
Marvin Hirsch of Flamhaft Levy Hirsch & Rendeiro represents Stetch. He said his client “did nothing illegal” and has been cooperating with Queens prosecutors. Though “surprised” by the indictment, Hirsch said Stetch would be “vindicated at the end of the day,” noting his client had no money and led no “exorbitant lifestyle.”
Schwartz’s attorney, Richard Rehbock of Jericho, called the charges “completely bogus.” Rehbock said “nothing was done with the knowledge of Mr. Schwartz. He certainly wouldn’t have put up with it.” Rehbock said Schwartz went to authorities when he “discovered irregularities” and has cooperated with various agencies. For Queens prosecutors to allege Schwartz’s involvement was “an absolute falsehood. We will fight this case to the end,” said Rehbock.
The prosecution is being handled by Senior Assistant District Attorney Allison Wright, in the office’s Economic Crimes Bureau.