Bad Company

An attorney who was convicted of theft by unlawful taking or disposition has been suspended for one year by the New York Appellate Division for the Second Judicial Department.

In determining an appropriate measure of discipline to impose, we find that the respondent presents as a sympathetic figure. While we find that her attempts to prevent the misuse of her personal and professional identity were feeble, at best, the respondent evidently was experiencing severe mental and psychological issues at the time, including alcohol addiction, which resulted in her arrest and conviction for driving while intoxicated, for which she received an admonition in 2013. Ultimately, the respondent’s conduct appears to have been the product of her involvement in a destructive relationship with the person who, with members of his family, was the true perpetrator of the fraud, and her severe mental and psychological problems; she was not motivated by greed. Her cooperation with the investigation and prosecution of the perpetrators is a factor in her favor; it appears to be the reason she received a light sentence. As the Special Referee noted in her report, the respondent is genuinely remorseful. Moreover, the Special Referee noted that the respondent is now “clean and sober,” as well as a single mother. The Special Referee concluded that “[i]t seems doubtful” that the respondent’s errant behavior would be likely to reoccur.

NJ.com has the story of the criminal case

According to the Monmouth County Prosecutor’s Office, an investigation – which began in May 2010 after a concerned homeowner contacted the office – uncovered that Tropeano and a number of his associates from Hawthorn Capital Corporation, formerly of Manalapan and New York City, systematically scammed dozens of homeowners and financial institutions throughout New Jersey and New York out of more than $7.5 million.

The Prosecutor’s Office said homeowners would refinance with Hawthorne and banks would then issue mortgage funds at settlement to refinance the property. But rather than using these funds to appropriately pay off a homeowner’s original mortgage, Tropeano and his conspirators stole the settlement funds to benefit themselves and their families or to pay other business debts. Two title companies directly involved with Hawthorne – Hawthorne Abstract and Rapid Abstract – then intentionally failed to conduct proper records checks to ensure that original mortgages were paid in full and that the newly refinanced mortgages were properly recorded as existing debt.

As a result of the scheme, many of the victims had negative reports on their credit ratings and were forced to hire legal counsel. In some instances, the mortgage was never paid off and the victims were left with two mortgages, the prosecutor’s office said.

Authorities said Tropeano and his associates also stole the identities of two homeowners who filled out initial applications to illegally get lending institutions to fund refinances that never occurred.

(Mike Frisch)