Paul Bass Photo
Andrew Constantinou wasn’t a familiar face in Newhallville, but the devastation he helped wreak there earned him a five-year prison sentence.
Constantinou (pictured leaving court Tuesday afternoon) didn’t deal drugs. He didn’t shoot anybody.
He arranged real-estate loans out of a suburban office. And he participated in one of the most active mortgage-fraud rings ever caught gobbling up homes and mortgages in struggling New Haven neighborhoods on phony pretenses — then pocketed the cash while letting the properties rot.
Judge Janet Hall listened to Constantinou’s attorney argue in New Haven’s U.S. District Courthouse Tuesday that his client should be spared any jail time because of his abusive upbringing, among other reasons.
Then Hall handed down a 60-month jail sentence, followed by five years of supervised release and $2.1 million in restitution.
And she used the occasion to make a point about the seriousness of white-collar crime that destroys the public’s trust in the financial system, and in this case contributed to a national mortgage crisis that plunged the country into recession.
“I don’t mean to suggest that this [mortgage-fraud] scheme is the cause of the Great Recession,” Hall said during the three-plus hour sentencing. “But there’s no question it took a lot of people like yourself [who] created at least the real-estate portion of the Great Recession.”
A jury in April found Constantinou guilty of conspiracy to commit mail, wire, and bank fraud as part of a ring of realtors, “straw buyers,” attorneys and loan officers who faked documents and signed secret side deals in buying and obtaining some $7 million in loans on more than 40 properties in New Haven’s Newhallville, Fair Haven and Hill neighborhoods. They often put up no real money in those transactions. They divided up the money among themselves. And they left the properties to rot and be foreclosed upon in struggling neighborhoods where the fate of entire blocks can rest in part on conditions at one or two problem properties. The government calculated lenders’ combined losses on these loans at $4.8 million. (Links to dozens of previous articles about the case and the broader ring can be found at the bottom of this article.)
Besides debating who deserves what punishment for roles in the mortgage crisis, participants in Tuesday’s unusually lengthy sentencing session explored what would drive a man already in trouble for past financial shenanigans to put a good living at risk for relatively little money (at least as far as the government could prove).
The “Why” Question
Unlike two other fellow ring members already sentenced in this case (like the man in this case), Constantinou, who’s 58 and lives in Unionville, did not apologize at his sentencing. He didn’t even speak. He maintains his innocence; he plans to appeal, according to his lawyer, Hubert Santos.
Santos (pictured) did make the case for leniency before Judge Hall. Constantinou grew up in Cyprus, where his father “beat him regularly.” Once his mother saved the boy from a possibly fatal beating, Santos said; another time the boy rescued his mother from the same. The boy also looked out for his younger three brothers.
The family immigrated to Connecticut. In his teens, Constantinou hitched rides to work at the family pizzeria while also racking up good grades in high school. In subsequent years, he ran successful restaurants, recovered from losing one business when an employee stole from him, and rebounded from two divorces that followed alleged adultery by his wives, Santos said. His point: The man gets up from the “canvas” and returns to the ring (metaphorical boxing ring, not fraud ring), works hard, takes care of his family. He urged the judge to consider the man’s “character.”
Constantinou faced relentless pressure from employers like Countrywide Home Loans to write loans, more and more loans, as fast as possible, Santos said.
“The top dogs” at places like Countrywide “never got charged. There was a frenzy,” Santos argued.
In the end, the government proved that Constantinou collected a mere $10,000 for his role in the New Haven fraud ring, Santos noted. “He was making $300,000 a year as a loan officer. He was working around the clock.”
So then why, Judge Hall interjected, would he bother arranging fake leases and other documents, recruit lawyers to participate, and then lie about it on the stand? For such relatively little money?
Santos agreed to answer the question “hypothetically” — since his client continues to denies the charges for which he’s been convicted.
“Mr. Constantinou is a workaholic. Knowing that a mortgage was coming, he fell into into a trap. He wanted every application that he received to get funding. As a result he lost — hypothetically — to be worth it,” Santos offered.
“It doesn’t seem to me to be worth it,” Hall responded. “He’s not the only one [in this scheme] who didn’t make a lot of money who is going to pay a price.”
“He had been trained from his childhood in Cypress to survive. You’ve got to work, work, work,” Santos continued. “He got caught up in … the craziness in this country that happened to so many people.”
Santos urged the judge to grant Constantinou probation rather than jail time.
Sending A Message
Judge Hall: Why?
The prosecutor in the case, Assistant U.S. Attorney David Huang, argued that that would send the wrong message to other white-collar crimionals. He sought an 80 to 92-month prison sentence.
He addressed the judge’s “why” question: “Sometimes the answer is the simplest one: He was greedy. He wanted money.”
He offered a different personal history of Constantinou: A career financial fraudster who got in trouble with regulators in both Maine and Connecticut, made a deal with Connecticut banking authorities not to do business with a certain colleague — and then promptly continued doing shady deals, including with that same colleague, who sent him a kickback.
“He has not taken responsibility for anything in his life,” Huang argued. Instead, he learned from past negotiations with regulators that he can strike a settlement, pay a fine, then “keep going.”
“A slap on the wrist will only embolden him” again, Huang argued.
Judge Hall agreed with him. In sentencing Constantinou to prison, she said she needed to send a message to other loan officer and mortgage brokers that they face consequences if, like Constantinou, they falsify documents and create hidden side agreements to lie on the stand.
“I don’t really know the answer to the ‘why’ question,” Hall said. She does know, she continued, that “what you did was flat-out old-fashioned fraud.” Blaming people higher-up the financial food chain for his own misdeed, she said, is like getting caught stealing from a store and “complain[ing] the security guard should have done better” in stopping the theft.
Or as she put it earlier in the session, referring to her experiences driving to Bridgeport federal court, “there were many people on the road traveling 85 miles per hour. Only one got pulled over. It didn’t make that person any less guilty.”
On To The Ringleader
Levitin: Up next.
In fact, more than a dozen fraudsters got caught in two separate New Haven mortgage-fraud rings investigated by the feds. Most have pleaded guilty and been sentenced, or else tried. (See story links below.)
The leader of Constantinou’s ring, Joseph Menachem “Yossi” Levitin, awaits sentencing. Therein lies one of the most curious aspects of this investigation, and perhaps a more germane question of unequal treatment.
The feds have allowed Levitin to remain free for years because he is cooperating in the cases against his former associates. In fact, he was a star witness against Constantinou.
On Tuesday, Judge Hall agreed to a prosecution request to bar Constantinou from doing mortgage lending as part of his sentence.
And yet the feds have allowed Levitin — who has pleaded guilty to crimes that personally netted him an estimated $1 million — to rebuild his controversial real-estate empire in distressed New Haven neighborhoods. Click here to read about how that’s going.
Levitin wasn’t in court Tuesday for Constantinou’s sentencing. Levitin’s attorney, William Dow, was there, observing. Levitin’s turn is scheduled to come next month.
Previous articles about this case and a related New Haven mortgage-fraud case:
• Will White-Collar Crime Bring Jail Time?
• Facing 30 Years, Scammer Turns Star Witness
• Scammer, Awaiting Sentence, Rebuilds
• Patsies? Or Schemers?
• Fraud Defense: Banks Were The Real Crooks
• Jury Convicts 2 In Mortgage Scam
• Kwame & Straw Buyer Leave Trail Of Blight
• Mortgage Fraudster Gets 15 Months
• 1 Mortgage Fraud Ring Down, Feds Turn To 2nd
• “Big Liberal” Gets 5 Years For Ripping Off Poor
• White-Collar Criminals Sent To Slammer
• Judge Baffled By Two Morris Olmers
• Feds Will Retry Avigdor
• 4 Convicted In Fraud Scam; Mistrial For Rabbi
• Jury Can’t Agree In Scam Trial
• Avigdor’s Final Plea: Follow The Money
• Claire: The Rabbi Is Kosher
• Wednesday The Rabbi Took The Stand
• Straw Buyer Lured Into A Wild Ride
• After Big Fish Plead, Smaller Fry Point Fingers
• Slum-Photo Doctor Makes A Call
• What Happened At Goodfellas Didn’t Stay At Goodfellas
• Fraud Trial Opens With Oz-Like Yarn
• “Partying” MySpacer Lined Up Scam Homebuyers
• “Straw Buyer” Pleads Guilty
• Neighbors, Taxpayers Left With The Tab
• FBI Arrests Police Commissioner, Slumlord, Rabbi
• One Last Gambit Falls Short
• Was He In “Custody”?
• Is Slum Landlord Helping The FBI?
• Feds Snag Poverty Landlord
• Police Commissioner Pleads
• Mortgage Fraud Mastermind Gets 10 Years