Metro

Bank scammers convicted in $100M mortgage racket

Manhattan prosecutors won grand-slam convictions today against four of the unsung villains of the housing market collapse — a quartet of brokers and lawyers who ran a $100 million mortgage scam using properties and straw buyers from across the city.

DA Cyrus Vance called the case against AFG Financial Group and its principals one of the largest and most complex mortgage fraud prosecutions in the country. To date, the prosecution has yielded 27 convictions.

“This type of criminal conduct contributed to the general collapse of the housing market,” he said of massive conspiracy case, which was begun by investigation division prosecutors under previous DA Robert Morgenthau.

“These defendants built a corrupt enterprise — complete with corrupt lawyers, bankers, appraisers, straw buyers and others — to control every aspect of the residential lending process,” Vance said.

Convicted today after a nine-week trial of charges of enterprise corruption, scheme to defraud, conspiracy, grand larceny and other felonies were AFG president Aaron Hand, 38, of Oyster Bay Cove; CEO Eric Shields, 45, of Media, PA; attorney Kenneth Law, 54, of Pelham, NY; and property locator Jerry Strklja[cq], 36, of Astoria, Queens.

They face up to 25 years prison at sentencing next month.

For four years, AFG portrayed itself as a legitimate mortgage broker, but instead tricked banks into handing out multi-million-dollar mortgages based on sham property sales and wildly inflated appraisals.