Settlement agent guilty in mortgage fraud scheme

WASHINGTON (Reuters) - A former president of the National Settlement Agency pleaded guilty on Thursday to charges of stealing $13 million in refinanced mortgage loan proceeds, the U.S. Justice Department said.

Steven Leff, acting as a settlement agent for numerous FDIC insured banks, embezzled the proceeds of several refinance loans, which should have been used to pay off the outstanding principal amounts on the prior mortgages, the Justice Department said.

"Leff was entrusted with large sums of money intended to be disbursed to others in the refinancing process. In simple terms, he stole much of it," FBI official Mark Mershon said in a statement.

As part of his guilty plea entered in federal court in Central Islip, New York, Leff admitted that, in total, he stole more than $13 million in refinanced loan proceeds.

Leff, 45, faces a maximum sentence of 30 years in prison.

The Justice Department also announced that a federal grand jury in Greenbelt, Maryland indicted eight people on charges related to a $35 million mortgage fraud scheme.

Between September 2004 and June 2007, the defendants promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, but left them homeless and with no equity, the Justice Department said.

The defendants ran a "foreclosure-prevention" scheme through several companies, including one called the Metropolitan Money Store, the Justice Department said.

If convicted on charges including mail fraud and money laundering, the defendants would all face a maximum sentence of 30 years in prison and a $1 million fine.

(Writing by JoAnne Allen; Editing by Anthony Boadle)