It took some nine years for the wheels of justice to catch up with one of this city’s most notorious real estate con men. But, justice finally prevailed last week in the case of Michael David Scott, a now 51-year-old from Mansfield who ravaged the Dorchester real estate market with a rash of bogus mortgage and bank loan schemes.
In the conclusion to a wide-ranging federal case, Scott pleaded guilty last week to 32 counts of wire fraud, 13 counts of bank fraud, and 22 counts of money laundering. He will be sentenced in August and faces serious time— up to 30 years and $1 million on each count of bank fraud. Scott is already in jail as he awaits a trial on unrelated charges of defrauding a local couple out of some $200,000 in another real estate scam. Two of Scott’s co-conspirators — Jerrold Fowler, 31, and Thursa Raetz, 40, both of Norfolk, Va.— have pleaded guilty to two counts of wire fraud.
Scott’s activity was first tracked and reported by the Dorchester Reporter in 2008 as part of a series by veteran reporter Chris Lovett, the news director at BNN-TV’s Neighborhood Network News. Lovett, a Dorchester native who sometimes contributes to the Reporter, sniffed out Scott’s funny business in a review of mortgage data triggered by the mounting number of foreclosures that was — back then— approaching epidemic proportions in our community.
In a story that ran with the headline “Three-decker bingo: Lenders continue to pump big money into condos despite foreclosure histories,” Lovett found that Scott was involved in some 90 condo conversions over a two-year period. He documented how Scott often flipped the same home over and over again. The Boston Globe’s Jennifer McKim followed up with an extensive report on Scott’s activities in that newspaper in 2009.
Scott’s scheme targeted multi-family properties across the city, but especially here in Dorchester, beginning in 2006. It worked like this: Scott would scoop up multi-family homes— typically three-deckers— and arrange with straw buyers for them to purchase individual units as condos. Scott submitted phony loan applications to make the deals happen— in one instance, he was in cahoots with shady bank employees to cook the books. Then he and his co-conspirators would let the units go into default, often plunging whole streets into decay, while they made off with the profits from short-sale proceeds.
Amazingly, Scott kept up his bold dealings after he was indicted in 2010. It was only after the Globe and the Reporter exposed his continued practices that he lost his realtor’s license in 2012.
Scott’s scam was not a victimless crime.
As US Attorney Carmen Ortiz said when Scott was initially indicted, “Frauds of this kind line the pockets of unscrupulous schemers at the expense not only of mortgage lenders, but of so many homeowners who saw property values in whole neighborhoods decimated.”
It’s no secret that state and federal authorities were too slow to act on the rampant real estate shenanigans that helped plunge the country into deep recession in the mid-to-late 2000s.
Michael David Scott is a poster boy for that reckless, unchecked period that wreaked havoc on the streets where he operated— places with names like Parkman Street, Adams Street and Navillus Terrace.
We hope the punishment he will receive fits the crime.
– Bill Forry