Ex-real estate investor admits role in $4.6 million fraud scheme

ALBANY -- A former Albany businessman pleaded guilty in federal court today to participating in a $5.3 million mortgage fraud scheme. 

Kevin O'Connell, 35, admitted his role in the scheme involving his former businesses PB Enterprises, Inc. and Greater Atlantic Associates, Inc. on Central Ave. 

Federal prosecutors say in the period from July 2003 through December 2007, O'Connell submitted false loan applications for numerous residential properties in the Capital District and diverted the mortgage funds for his personal use and to others.

Through the scheme, O'Connell and others obtained excessive mortgages totaling at least $5,324,225 in at least 73 real estate transactions, and diverted a total of approximately $4,628,886 of proceeds to themselves and to others, prosecutors say.

All 73 of the properties were subsequently placed in foreclosure, resulting in substantial losses to banks and other lenders. 

O'Connell pleaded guilty to felony laundering of money instruments. He's agreed to forfeit the criminal proceeds and pay back his victims. 

O'Connell faces a maximum of up to 20 years in prison and a fine of up to $500,000 when he is sentenced March 1, 2010.