NEW HAVEN, CT—A property manager and real estate agent was sentenced today to 22 months in prison for his role in a mortgage fraud scheme arising from the purchases of more than 40 properties in New Haven, New Jersey U.S. Attorney Paul J. Fishman announced today.

Menachem Yosef Levitin (a/k/a Joseph), 29, of New Haven, pleaded guilty before Chief U.S. District Judge Janet C. Hall on July 5, 2012, to an information charging him with conspiracy to commit mail, wire, and bank fraud. Judge Hall imposed the sentenced today in New Haven federal court.

According to documents filed in this case and the evidence at trial:

From 2006 to 2008, Levitin and others conspired to defraud mortgage lenders of millions of dollars of mortgage proceeds by inflating the contract price that the sellers of the properties had actually agreed to accept. The scheme involved multi-family properties in New Haven.

The lower sale price, which ranged from approximately $30,000 to $145,000 less than the contract price, was not disclosed to the lenders from which the buyers obtained financing to purchase the properties. In most of the fraudulent transactions, the buyers did not make any deposits or down payments. Levitin and his conspirators used some of the fraudulently obtained mortgage proceeds to cover the down payments and deposits. At or shortly after a closing, the borrowers would often receive thousands to tens of thousands of dollars in cash back, although these payments were not disclosed to the lender...