Sentence In Hudson Valley-Based Mortgage Elimination Scam

MOUNT PLEASANT, NY — The head of a group of con artists who defrauded homeowners and banks in a phony debt-elimination scheme was sentenced Friday to 11 years in prison. The $38 million scheme victimized homeowners in Westchester and Putnam counties in New York, as well as people in Connecticut.

Jacqueline Graham ran the Terra Foundation, based in Valhalla, which promised homeowners who were having trouble meeting their mortgage payments that they would, for a fee, investigate and eliminate their mortgages.

The fraudulent scheme, which was created by Graham and Bruce Lewis, involved Terra performing "audits" of clients' mortgages, sending pseudo-legal paperwork to the banks and/or lenders holding the mortgages, and ultimately filing purported mortgage discharges with the relevant county clerks' offices.

The phony discharges were signed by Lewis or other co-conspirators, claiming falsely to represent the banks and/or mortgage lenders.

As a result, anyone doing a title search for one of Terra's clients would see that the client's mortgage had been satisfied. The mortgages had not, however, been discharged, and the mortgages were eventually reinstated — but not before the clients had paid their fees.

Everyone working on the scheme with Graham and Lewis lived in the Hudson Valley, including one of the other leaders, John Ruzza of Mahopac; Rocco Cermele of Yonkers, who was Terra's director of operations and who recruited clients, among other duties; Paula Guadagno of Verplanck, who did real estate title work for, and filed discharges on behalf of, Terra; and Anthony Vigna of Thornwood, a lawyer and CPA who worked in Terra's offices.

Vigna was formerly a college accounting and law professor, including stints on the faculties of Mercy College, Iona College, SUNY Maritime College, College of Mount St. Vincent and Westchester Community College.

"Jacqueline Graham brazenly defrauded vulnerable homeowners during the housing crisis by falsely promising that, for substantial fees, she could make millions of dollars of their mortgage debt disappear," Manhattan U.S. Attorney Geoffrey S. Berman said in announcing the sentence. "In reality, she pilfered her victims’ money, leaving them far worse off, and some ended up losing their homes. Now Graham will spend 11 years in federal prison for preying upon her many victims."

In addition to her prison term, Graham, 54, formerly of Antioch, California, and Levittown, Pennsylvania, was sentenced to five years of supervised release and ordered to pay restitution to her victims in the amount of $694,450 and forfeiture of $138,941.86. She was convicted in 2019.

Lewis, 67, formerly of Alaska and Washington State, previously was sentenced by Judge Nelson S.Román to seven years in prison, three years of supervised release, and forfeiture of $149,408.

Vigna, 61, previously was sentenced by Judge Román to one year and one day in prison, three years of supervised release, and $250,500 of restitution.

Ruzza, 49, previously pled guilty before U.S. District Judge Cathy Seibel to one count of participating in a conspiracy to commit mail fraud, wire fraud, and bank fraud relating to the Terra scheme, as well as one count of participating in a conspiracy to commit wire fraud, two counts of bank fraud, two counts of wire fraud, and one count of obstruction of justice.

Cermele, 57, and Guadagno, 62, previously pled guilty to their participation in the scheme.

Berman praised the outstanding investigative work of the Federal Bureau of Investigation and also thanked the Westchester County District Attorney’s Office and the Department of Housing and Urban Development for their assistance in the case.

SEE: Conviction In Westchester-Based Mortgage Elimination Scam