Connecticut Real Estate Agent Agrees to Plead Guilty to Defrauding Clients in Long Running Short Sale Fraud Scheme

BOSTON – A real estate agent was charged yesterday and has agreed to plead guilty in connection with a multi-year scheme to defraud his clients by engaging in fraudulent short sales of government and bank-owned properties to straw buyers acting at the direction of the defendant and a co-conspirator.

Sheldon Haag, 34, of Glastonbury, Conn., has agreed to plead guilty to one count of conspiracy to commit wire fraud. A plea hearing has not yet been scheduled by the Court.

According to the charging document, Haag and a co-conspirator used straw buyers to acquire properties owned by the clients of the brokerage where he worked, which included banks and other mortgage holders. The straw buyers included a shell company set up by a co-conspirator as a purported construction company. Haag and his co-conspirators allegedly hid their involvement as the de facto buyers of short sale properties from their clients, the owners of the properties, and used their inside knowledge as the owner’s broker to minimize sale prices in order to maximize their gain from later “flipping” the properties.

It is also alleged that, while perpetrating the “flipping scheme,” Haag and his co-conspirators further defrauded clients by submitting fraudulent renovation bids from contractors to their own clients, including from the fake construction company they controlled through a co-conspirator. Once their clients accepted a fraudulent bid, Haag and his co-conspirators would allegedly hire different contractors at much lower cost and pocket the difference between the fraudulent bid and the actual cost of property repairs.

The charge of conspiracy to commit wire fraud provides for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.  

Acting United States Attorney Joshua S. Levy; Christopher DiMenna, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Christopher Algieri, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office made the announcement today. The United States Department of Housing and Urban Development provided valuable assistance.  Assistant U.S. Attorney Kriss Basil of Levy’s Securities, Financial & Cyber Fraud Unit is prosecuting the case.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.