Suffolk County attorney Stephen J. Caputo was disbarred by an appellate panel last week for participating in a scheme to defraud mortgage lenders out of millions of dollars. Mr. Caputo, of East Setauket, who was admitted to the bar in 1984, pleaded guilty in the Southern District federal court to one count of bank fraud and five counts of wire fraud, both felonies, on Jan. 4, 2010. New York’s Judiciary Law requires the automatic disbarment of an attorney convicted of a felony. A unanimous five-member panel of the Appellate Division, Second Department, found in Matter of Caputo, 2011 NY Slip Op 06262, that the federal crime of wire fraud was “essentially similar” to grand larceny in the second degree and scheme to defraud in the first degree.
According to the May 2009 indictment in United States v. Meyers, 1:09-cr-00523, Mr. Caputo acted as an attorney for buyers and sellers in a wide-ranging mortgage fraud scheme in New York City and Long Island. Participants in the scheme obtained mortgage loans to buy properties, either themselves or through straw buyers, by misrepresenting their finances. They often obtained loans in excess of what they paid for the properties and kept the difference. They then either flipped the properties immediately or defaulted on their loans, leaving lenders with no choice but to foreclose and suffer a loss.
