In short
- Norman and her co-conspirators used false rent rolls and forged lease agreements to obtain fraudulent loans for their companies.
- The group caused a total loss of $18,203,030 to financial institutions and commercial lenders, including two community credit unions.
What happened
Jeannette Norman, along with her husband and sister, conspired to provide false financial information to commercial lenders, resulting in fraudulent loans for their property companies. The scheme involved forged lease agreements and fictitious rent rolls for properties in Massachusetts and Connecticut.
Norman was sentenced to 22 months in prison and ordered to pay $18,203,030 in restitution. Her co-conspirators received sentences ranging from six months to four years and were also ordered to pay restitution for their roles in the fraud.
Norman and Masaschi were partners in dozens of limited liability companies, including LL Realty Developers, LLC, through which they owned primarily commercial and some residential property in Western Massachusetts, Connecticut and elsewhere.
In numbers
- $18,203,030 total loss caused to lenders
- $60,123,000 loans fraudulently obtained or sought
- 22 months prison sentence for Jeannette Norman
What compliance teams should check
- Review loan applications from LL Realty Developers, LLC and related limited liability companies for false rent rolls and forged lease agreements.
- Scrutinize commercial loan files involving properties in Springfield, East Longmeadow, and Enfield for materially false financial information.
- Check for defaults and vacant properties linked to loans issued to Norman, Masaschi, and Gendron, especially those involving two community credit unions.
Why it matters
This case highlights the risk of fraudulent loan applications using forged documents and false financial information, which can lead to substantial losses for financial institutions. Compliance officers must be vigilant in verifying the authenticity of rent rolls, lease agreements, and ownership structures, especially when dealing with commercial property loans. The involvement of multiple limited liability companies and community credit unions underscores the need for robust due diligence and ongoing monitoring to detect and prevent similar fraud schemes.
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