Ex-Carlsbad Real Estate Consultant Sentenced to Five Years in Prison for Mortgage Fraud, Tax Evasion

A former self-proclaimed Carlsbad-based real estate consultant who fraudulently induced lenders to fund millions of dollars in mortgage loans to purchase real estate in Florida, Georgia and California was sentenced in San Diego Friday to five years in federal prison.

U.S. District Court Judge Janis Sammartino also ordered John J. Borzellino to pay $4.1 million in restitution.

In order to execute his illegal conspiracy, Borzellino, also known as John J. Ross, arranged to purchase homes by offering more than the seller's asking price, with the understanding that the money over-and-above the asking price would be funneled to an entity under his control, prosecutors said.

Borzellino, 53, disguised the funds diverted to him by falsely characterizing them as "commissions" or "consulting fees" to be paid by the sellers at closing, according to prosecutors.

The defendant -- who also assumed a number of false identities to conceal his role in the transactions -- defrauded lenders into making more than $8 million in mortgage loans to purchase properties in the name of his wife and several others, prosecutors said.

Borzellino also admitted that he failed to declare to the Internal Revenue Service almost $1 million in income he derived from his various schemes.

-City News Service