A 71-year-old Pennsylvania man faces up to 30 years in prison after pleading guilty to a federal mail fraud charge stemming from a mortgage finance scheme prosecutors said cheated more than 800 investors out of nearly $30 million.
Wesley A. Snyder, of Oley, Pa., entered the guilty plea Wednesday in U.S. District Court for the Eastern District of Pennsylvania. The plea agreement was announced Nov. 9 by the U.S. Attorney for the Middle District of Pennsylvania.
Prosecutors said Snyder signed up 811 customers for a pyramid scheme he dubbed the “Wrap Around, Equity Slide Down Discount” mortgage program. Clients agreed to take the excess proceeds from purchase or refinance mortgages and invest them with Snyder’s companies, in exchange for a lower interest rate.
Prosecutors said that beginning in 1988, Snyder took in more than $65.6 million from “Wrap Around” mortgage customers, but forwarded only $39.1 million in payments to their lenders. An additional 31 investors lost $3 million in a separate “Mortgage Participation” investment scheme.
Snyder’s clients did not realize anything was amiss until September, when he notified customers in seven counties that he could no longer make mortgage payments on their behalf. Four days later, on Sept. 18, Snyder filed for bankruptcy on behalf of six companies he operated, including Personal Financial Management and Image Masters Inc.
Some victims have also filed suit against Snyder and the lenders who provided the underlying mortgages, and state and federal agencies are also investigating the defunct businesses, the Associated Press reported.