News Column

Collier man portrayed as dupe in fraud trial

May 29, 2014

By Rich Lord, Pittsburgh Post-Gazette



May 29--There was no dispute Wednesday about whether James Lignelli's work appraising three properties included lies.

The question at the first day of the 59-year-old Collier appraiser's trial on bank fraud, wire fraud and conspiracy charges: Did he endorse the lies in exchange for cash and trips to Florida, or was he duped into helping con men to fool financial institutions?

Assistant U.S. attorney Brendan Conway told a jury that Mr. Lignelli provided appraisals for since-convicted businessmen Michael McFerron Pope and Michael Staaf, exaggerating the values of properties so they could get outsized loans. When the men stopped making payments on the loans, the banks foreclosed.

"We get more than $5.4 million [difference] between Mr. Lignelli's appraisals and what these properties actually sold for" in foreclosure, Mr. Conway said. Banks "relied on Mr. Lignelli to tell the truth, and they lost a lot of money because of it."

Defense attorney Paul Boas said Pope and Staaf were the "masters of deception."

"They're professional liars, and they're going to take the stand, and the government is going to ask you to believe them," Mr. Boas said. "They are going to testify against Jim Lignelli, who is almost 60 years old, never been in trouble with the law, and they're going to testify against him to get out of prison early."

Mr. Conway played for the jury clips of 2009 meetings surreptitiously recorded by Jay Berger, a Fox Chapel mortgage broker who was later convicted of conspiracy, but cooperated with the government and avoided jail time. He died May 7.

Staaf, 45, of New Brighton, said at one of the meetings that he would have to "take [Mr. Lignelli] to Florida for a weekend" to get him to appraise a Moon building and justify a desired multimillion-dollar loan.

Staaf "wined and dined and basically paid for everything down there," Mr. Conway said.

Mr. Lignelli appraised that property, at 993 Brodhead Road, at $3.2 million, but a bank refused to make the loan, Mr. Conway said. The property later sold for $892,000.

In 2012, Staaf was sentenced to 10 years in prison for a money laundering conspiracy. Last month, the government filed a sealed motion in the case, which Mr. Boas said would result in Staaf's release, perhaps "next week." Mr. Conway said Staaf's office building on Perry Highway, appraised by Mr. Lignelli at $3.4 million, went for $1.3 million in foreclosure.

Mr. Boas countered that Staaf created false leases and even fictitious tenants to fool Mr. Lignelli into providing inflated appraisals to back the loan he got.

An unfinished Peters home appraised by Mr. Lignelli at more than $1.2 million sold at foreclosure for just $218,000, Mr. Conway said. The prosecutor accused Mr. Lignelli of tailoring his appraisal to Pope's wishes and justifying the value using prior sale prices of "gorgeous homes, huge, all the finishing touches."

Mr. Boas said that Pope brought in a "straw buyer" who was supposedly willing to pay more than $1.2 million for the property, tricking Mr. Lignelli into overvaluing it.

Pope, 49, of Upper St. Clair, was sentenced in July 2009 to seven years in prison. Last month, in response to a sealed motion by the government, and at a closed-door hearing, that sentence was reduced to time served.

Pope "got out in exchange for his testimony in this case," Mr. Boas said.

The trial is expected to run several weeks.

Rich Lord: rlord@post-gazette.com.

___

(c)2014 the Pittsburgh Post-Gazette

Visit the Pittsburgh Post-Gazette at www.post-gazette.com

Distributed by MCT Information Services


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Pittsburgh Post-Gazette (PA)