Lisa Rotolo, former owner and operator of Diamond Title in Sarasota, Florida, pleaded guilty earlier this week to one count of conspiring to commit mortgage fraud and one count of making false statements for her part in an alleged $47 million mortgage fraud scheme.

Rotolo was one of fourteen individuals charged in February in a 44 count federal indictment.  Rotolo was indicted in 20 of the 44 counts, but in exchange for her guilty plea and her promise to testify against any co-conspirators who choose to go to trial, 18 of those counts were dropped against her. 

Rotolo is the first individual to plead guilty in the case.  Several other co-conspirators were expected to plead guilty today.  Neither of the indicted individuals thought to be the most important members of the conspiracy-- alleged mastermind Craig Adams and mortgage broker Richard Bobka-- were among those expected to plead guilty this week.

Rotolo originally was arrested in April 2009 on charges of conspiracy, bank fraud, wire fraud and making false statements in connection with loan applications.  She has cooperated with authorities since her arrest.  Despite her cooperation and her guilty plea, Rotolo will serve at least some prison time for her crimes-- the judge made it clear to her at her plea hearing that probation was not an option for her because of the seriousness of the crimes to which she admitted.

Rotolo crimes were central to an alleged flipping scheme in which dozens of properties were sold back and forth between a number of straw buyers, inflating the price more and more with each subsequent sale.in order to obtain loans in amounts far beyond what the properties were worth.  The straw buyers in these transactions allegedly had no intention of paying these mortgages off, and they went into default.  Instead, members of the conspiracy only made payments when it was necessary to avoid detection, and pocketed the rest of loan money. 

In an investigative report, the Sarasota Herald-Tribune identified over $123 million in mortgage defaults tied to the scheme.

In her plea agreement, Rotolo admitted to participating in "numerous fraudulent residential real estate transactions."  Rotolo assisted in these transactions by allegedly preparing dual sets of HUD-1 settlement statements, sending falsified versions of those settlement statements to lenders, and disbursing money to co-conspirators. 

Rotolo admitted in her plea agreement that she lied to lenders on several occasions in order to  fraudulently obtain a $1,480,000  mortgage from Washington Mutual bank on a Sarasota residence in the name of Craig Adams' 80-year-old mother, Jocelyn Adams, who, according to Rotolo's admissions, was a straw buyer and did not sign the closing documents.  Rotolo notarized those documents.  Rotolo also prepared a falsified HUD-1 settlement statement-- sent to the lender-- which showed an inflated $1,850,000 purchase price, $250,000 above the true purchase price. Craig Adams allegedly forged his mother's signature on those closing documents.

Rotolo's sentencing will likely not occur until after the trials of her alleged co-conspirators.