United States Attorney Mary Beth Buchanan announced today, May 22, 2008, that Scott Winovich, a resident of Mars, Pennsylvania, has been sentenced in federal court in Pittsburgh, Pennsylvania to 41 months of incarceration and three years of supervised release on his conviction of Bank Fraud and Tax Evasion.

Chief United States District Judge Donetta Ambrose imposed the sentence on Winovich, age 43.

According to information presented to the court by Assistant United States Attorney Brendan T. Conway, Winovich was involved, through various businesses, with acquiring rental properties in the Pittsburgh, Pennsylvania area.  Between 1994 and 2003, Winovich purchased hundreds of rental units and other property using loans exceeding $14 million that he received from a variety of financial institutions.  Winovich obtained the loans fraudulently by submitting appraisals that overstated the values of the properties, income verification documents including tax returns that overstated his actual income, and fake leases that misrepresented the rental income and occupancy level of the properties.  He also falsely represented that improvements had been made on the properties when he knew that was not true.

As the loans obtained by the defendant began to fall into default, the defendant began transferring properties to companies controlled by himself or his wife, or to other close associates in an attempt to avoid creditors and the Internal Revenue Service.  The financial institutions that lent money to Winovich ended up losing in excess of $3,000,000.

In terms of the tax evasion, the defendant failed to report nearly $800,000 of capital gains that he earned through the sales of properties in 2003 and 2004.  He also failed to file individual income tax returns for those same years.

Ms. Buchanan commended the Mortgage Fraud Task Force for the investigation leading to the successful prosecution of Winovich.  The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry.  Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service.  Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.

Mortgage industry members with knowledge of fraudulent activity are encouraged to call the Mortgage Fraud Task Force at (412) 894-7550.  Consumers are encouraged to report suspected mortgage fraud by calling the Pennsylvania Attorney General's Consumer Protection Hotline at (800) 441-2555.