Legal Ethics
‘Scrivener’ Closing Attorney Ruined By $19M Real Estate Fraud
Posted Feb 11, 2008, 07:34 pm CST
By Martha Neil
Atlanta attorney R. Joseph Costanzo Jr. was a little fish in sea of bigtime mortgage fraud, according to his defense lawyer.
But after two years of closing fraudulent real estate deals in the Atlanta area as part of a $19 million "flipping" scheme that reportedly involved at least 21 people, Costanzo was a major player in the scheme as far as prosecutors and the federal judge who sentenced him earlier this month were concerned. He received a 41-month prison sentence after pleading guilty to conspiracy and fraud charges, and was ordered, along with co-defendants, to repay $7.8 million, despite his lawyer's claims that he acted under the influence of alcohol and a bipolar disorder, recounts the Fulton County Daily Report.
Now, according to his lawyer, he is a broken and shamed man.
For his help with the fraud, Costanzo earned just under $29,000 for 14 transactions—roughly what standard closing fees would have brought him, says defense lawyer Edward T.M. Garland in a memorandum to the court.
A 1969 graduate of Emory University School of Law, Costanzo knew little about real estate, Garland writes, and acted as a "scrivener" rather than an active participant in the fraud:
"Mr. Costanzo's function was merely to meet the clients at the closing table and have them sign on the designated lines, and to explain in a very summary fashion what the documents were. He possessed very little understanding of the whole process before becoming involved in these closings.”