A federal grand jury in Bridgeport returned a superseding indictment charging Bradford Barneys, 50, of Odenton, Md., with conspiring with Timothy W. Burke in a long-running fraud scheme that targeted distressed homeowners throughout Connecticut, including Easton.
Barneys is an attorney licensed to practice in Connecticut and has an office in Bridgeport.
The 12-count superseding indictment was returned March 30 and unsealed today, according to Deirdre M. Daly, United States Attorney for the District of Connecticut.
Burke, also known as “Bill Burke,” “William Burke,” “Kerry Saunders,” “Pat Riley,” “Jim Caldwell,” “Jim Saunders,” “Tom Morrisey,” “Jimmy,” “Phil Burke,” “Phil,” “Burt,” “James Burke,” and “M. Soler,” 64, of Easton, was originally charged by indictment on Feb. 10, with mail fraud, wire fraud, tax evasion, money laundering and identity theft offenses.
The superseding indictment charges him with additional mail fraud and money laundering counts, Daly said.
According to the indictment, since at least April 2011 and continuing to at least September 2014, Burke and Barneys conspired to defraud individuals, mortgage lenders and the U.S. Department of Housing and Urban Development by falsely representing to homeowners who were in, or facing, foreclosure on their homes that he would purchase their homes and pay off their mortgages.
The distressed homeowners agreed to sign various documents, including quitclaim deeds, indemnification agreements, management agreements and third party authorization letters, which Burke and Barneys presented to them on the understanding that, by signing the documents, they would be able to walk away from their homes without the burdens of their mortgage or other costs associated with home ownership.
Burke also told homeowners that the process of negotiating with the lenders can take time and that, in the meantime, to ignore any notices regarding foreclosure. After he gained control of these houses, Burke rented out the properties to tenants by advertising the properties on Craigslist and other means and falsely representing to tenants that Burke owned the property. Barneys, acting as Burke’s attorney, met or spoke with homeowners to reassure them about their sale to Burke.
The indictment further alleges that Burke or one of his agents then collected rent from tenants, in person, and Burke used the funds for his own benefit. When tenants failed to pay rent, Barneys would evict them so that Burke could obtain another tenant for the property.
Burke failed to negotiate with the homeowners’ mortgage lender or pay expenses associated with the home, including the homeowners’ mortgages and property taxes, and he failed to pay any rental income he was collecting to the homeowners. Many of the properties Burke purportedly purchased were ultimately foreclosed upon by the mortgage lender.
It is alleged that Burke undertook extensive efforts to disguise his true identity from his victims through the use of multiple aliases and business entities, and to conceal the sources of and expenditures from his criminal proceeds.
Burke is associated with multiple entities, including Quality Asset Management Services LLC; Birmingham Investments LLC; the Birmingham Group of Companies; Saunders Associates; New Haven Investments; Realty Partners Group; Preston Associates II; Landlord Maintenance Service, LLC; Turnkey Construction Services LLC; The Complete Handyman LLC; and Woodbridge Associates.
He is also alleged to have used the name of another individual in connection with his fraud without that person’s knowledge or consent. The indictment also alleges that Burke evaded paying more than $1 million in federal taxes.
The indictment further alleges that in approximately 2002, Burke was indicted by a federal grand jury in New Jersey on charges of conspiracy, mail fraud, and equity skimming. Burke subsequently pleaded guilty to conspiracy to commit both equity skimming and mail fraud, and he was sentenced to prison. Burke was released from federal custody in approximately August 2007 and began his federal supervised release at that time. One of the special conditions of Burke’s supervised release was that he refrain from employment in the real estate business or mortgage industry.
The indictment charges Burke with one count of conspiracy, five counts of mail fraud, one count of wire fraud, one count of aggravated identity theft, one count of tax evasion, and three counts of money laundering. If convicted, Burke faces a maximum term of imprisonment of 20 years on each count of conspiracy, mail fraud, wire fraud, and money laundering; a maximum term of imprisonment of five years for tax evasion, and a mandatory, consecutive two-year term of imprisonment for aggravated identity theft.
The indictment charges Barneys with one count of conspiracy and one count of mail fraud, each of which carries a maximum term of 20 years in prison.
Barneys and Burke appeared today before U.S. Magistrate Judge Donna F. Martinez and entered pleas of not guilty to the charges.
Burke has been detained since Nov. 19, 2015, when he was arrested on a criminal complaint. Barneys is released on a $50,000 bond.
Burke does not own a residence in Easton but was living in a house at 25 Abbey Lane as an apparent renter and had a car registered in Easton as of Oct. 1, 2014. His car taxes came due in July 2015, and Burke has an unpaid balance of $119.70 plus interest of $14.36, according to Tax Collector Christine Calvert.
The Easton Zoning Department received complaints about multiple unrelated people living at 25 Abbey Lane and issued a zoning violation to the property owner.
The property owner originally attempted to work with Burke and had some agreement that was not working out to their expectations, according to Phillip Doremus, zoning enforcement officer.
“When Burke was arrested, their quest to take repossession of their house was able to move forward,” Doremus said after Burke was arrested in November. “They got a judgment from the court to evict Burke and sent a copy of the judgment to the Planning and Zoning Department.”
The owners were concerned because they needed to do some repairs after Burke was evicted, but there was a cloud on the title from the zoning violation.
After they sent a copy of the judgment that evicted Burke, a document that the property owners would take possession of the house, and filed the changes on the land records, the zoning violation was resolved, he said. “They can live in the house or have someone else live in the house so long as they don’t violate the zoning regulations,” he said.
Capt. Richard Doyle said following Burke’s November arrest that Easton police assisted the federal authorities by executing search warrants and provided whatever background information they had on Burke.
“We had a couple of other investigations unrelated to the federal government,” Doyle said.
They involved properties in Easton.
The case is assigned to U.S. District Judge Michael P. Shea in Hartford and is being investigated by Internal Revenue Service — Criminal Investigation Division, the U.S. Department of Housing and Urban Development — Office of Inspector General, and U.S. Postal Inspection Service, with the critical assistance of the Middletown, Plainville, Easton and Coventry Police Departments, the Connecticut State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The case is being prosecuted by Assistant U.S. Attorney David T. Huang.
An indictment is only a charge and is not evidence of guilt, Daly stressed. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Individuals who believe they have been victimized by the alleged scheme and citizens with information that will be helpful to the ongoing investigation are encouraged to call 860-240-9735.