In Mortgage Fraud Scheme–

Trudeau Convicted On Federal Charges

By Andrew Gorosko

NEW HAVEN — A federal jury in US District Court has found William A. Trudeau, Jr, 49, of Westport, guilty of various conspiracy and wire fraud offenses stemming from his participation in a $3.5-million Fairfield County mortgage fraud scheme.

The jury returned its verdict on the afternoon of Tuesday, October 9. US District Judge Janet C. Hall presided at the trial, which began on September 27. Judge Hall has scheduled sentencing for January 2, 2013, at which time Mr Trudeau faces a maximum prison term of 40 years.

Mr Trudeau is being held as a prisoner while awaiting his sentencing. Mr Trudeau had been free following his November 2010 arrest, but a judge ruled in August 2011 that he had violated the conditions of his release and thus revoked his bail, resulting in his imprisonment for the past 14 months. 

In November 2008, Mr Trudeau was convicted in Danbury Superior Court of swindling Newtown Oil Company customers in 2002. In that case, a judge spared Mr Trudeau and his wife, Heather Bliss, from serving prison time because they came up with almost $122,000 in restitution to be distributed to oil company customers, who were bilked out of that money in late 2002, when the firm failed to honor fraudulent prepaid contracts for home heating fuel delivery.

In connection with the mortgage fraud case, US Department of Justice spokesman Thomas Carson said in a statement that Mr Trudeau, who is a real estate developer, was an unnamed principal in both Aspetuck Building & Development and in Huntington South Associates, LLC, the latter of which was a shell company that Mr Trudeau had used to pay for personal expenses and to secure loans fraudulently.

From February 2004 to April 2010, Mr Trudeau conspired with Joseph Kriz, Ms Bliss, Fred Stevens, Thomas Preston, and others to defraud federally insured financial institutions and mortgage lenders, Mr Carson said.

As part of the scheme, Mr Trudeau and his co-conspirators submitted false mortgage loan applications to financial institutions to obtain mortgages on various properties in Fairfield County in order to develop and sell the properties for profit, and to pay off debts owed to “hard money” lenders from whom they had previously obtained high interest loans, Mr Carson added.

The mortgage applications, which included false income information and omitted the mortgage applicants’ true indebtedness, caused the financial institutions to issue mortgage loans on properties that Mr Trudeau and his co-conspirators would not have otherwise been qualified to purchase, allowing the applicants to qualify for mortgages that far exceeded their ability to repay the loans, according to Mr Carson.

As a result of a separate 2003 federal conviction for fraud and tax offenses, Mr Trudeau was prohibited from owning or operating any business that was not in his own name, was required to report all of his assets to the federal court, and was ordered to pay more than $450,000 in restitution.

According to the mortgage fraud trial evidence and testimony, Mr Trudeau’s name did not appear on any documentation related to the loans or the properties for which the loans were obtained, and money was hidden in bank accounts that were not in Mr Trudeau’s name in part to prevent the collection of his court-ordered restitution.

Toward the end of the conspiracy, Mr Trudeau, with the assistance of others, sought additional money from a private lender purportedly to complete construction on one of the properties, Mr Carson said.

Mr Trudeau claimed to have a signed purchase contract for the property when, in truth, he did not, Mr Carson added. The evidence at trial established that Mr Trudeau took the money for uses that were unrelated to the completion of the property, according to Mr Carson.

Through this scheme, the federal government contends that Mr Trudeau and his co-conspirators fraudulently obtained more than $3.5 million in mortgage loans.

The jury found Mr Trudeau guilty of one count of conspiracy to commit bank fraud, mail fraud, and wire fraud, and also one count of wire fraud. The jury found Mr Trudeau not guilty of two counts of bank fraud, three counts of mail fraud, and two counts of wire fraud.

Mr Kriz, Ms Bliss, Mr Stevens, and Mr Preston have pleaded guilty to charges related to their involvement in this scheme. Each awaits sentencing.

The FBI investigated the case. It was prosecuted by Assistant US Attorneys Rahul Kale and Christopher Schmeisser.

In the Newtown Oil convictions of 2008, a judge, gave Mr Trudeau and Ms Bliss lengthy suspended prison sentences, plus probation, intended to serve as a deterrent against their again committing white-collar crimes.

In that case, the judge had found both Mr Trudeau and Ms Bliss each guilty of nine larceny-based felonies in the oil company scam involving the firm’s failure to deliver #2 home heating fuel in late 2002 to about 1,400 customers from nine towns who had entered prepaid fuel contracts with the firm.