A Buffalo, N.Y., landlord who agreed to pay $1.5 million in restitution and penalties and plead guilty to mortgage fraud has been sentenced to one year in prison.

Robert J. Palano, described by the Buffalo News as one of the city’s “biggest and most notorious landlords,” had faced up to seven years in prison after fraudulently obtaining more than $4 million in mortgage loans on 104 rental properties on the city’s east side.

According to New York Attorney General Eliot Spitzer’s office, Palano pocketed the loan proceeds and “absconded to Florida, leaving at least 10 lenders with defaulted loans secured by properties worth far less than the debt, and tenants being evicted through foreclosures.”

In April, Palano agreed to pay $1.5 million to settle a civil case brought by the Attorney General. Fannie Mae, which repurchased many of the loans Palano later defaulted on, received $1.4 million, and Palano’s appraiser, Michael Heigel, also agreed to pay $55,000 in restitution. Palano employed Heigel “to do all of his appraisals, which were grossly inflated over the true market value,” prosecutors alleged.

Palano also pled guilty to criminal charges of felony grand larceny and fraud in April. At his sentencing Monday, Palano’s lawyers asked State Supreme Court Justice Penny M. Wolfgang not to send him to prison. Wolfgang denied that request, citing Palano’s previous run-ins with the law.

Palano was the subject of a 2001 investigation by the Attorney General’s office, in which he was accused of cheating low-income first-time home buyers. Palano agreed to pay $225,000 in restitution to his victims to resolve the case. In 1991, Palano was sentenced to five months in prison and fined $125,000 for defrauding a home-loan program, the News reported.

“This would be a very different circumstance if this was the first time you were here, Mr. Palano. You obviously have not learned from your experiences,” Wolfgang said in handing down a prison sentence, the News reported.

The charges in the criminal case were based on 29 fraudulent loan applications submitted by Palano between March and November 2002 to GMAC Mortgage Corp.

Prosecutors said Palano lied on the applications when he declared that he was not at that time a party to any civil litigation. But Palano was a defendant in an unrelated mortgage fraud case brought by The Associates First Capital Mortgage Corp., a firm that agreed to reduce the mortgages of 130 properties that were the subject of the 2001 investigation by $1.6 million.

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