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Feds: Former Attorney Defrauded Families in Mortgage Scam

Feds: Former Attorney Defrauded Families in Mortgage Scam

Central Islip - (WALK) A disbarred Hauppauge attorney is being held without bail today after pleading not guilty Wednesday to charges of defrauding at least 10 Long Island families in a mortgage scheme, according to federal prosecutors.

Barry Stephen Zornberg, 54, of Hauppague is the alleged mastermind of a scheme that victimized at least 10 households who were seeking to avoid foreclosure in Blue Point, Elmont and Glen Head.  Instead, Zornberg is accused of bilking clients out of about $1.3 million in equity.

Zornberg and accomplices are accused of finding homeowners who were threatened with foreclosure, then persuading them to sign over the titles of their properties to "straw buyers" who would get mortgages under more favorable terms.  The owners were promised they'd be able to recover their homes in a year after paying rent to the straw buyers.  Instead, Zornberg and his crew kept the mortgage money and rent payments.

Zornberg was arrested Wednesday and accused of lying to FBI agents by falsely claiming he tried to talk at least one couple out of participating in the scheme. He pleaded not guilty at federal court in Centrl Islip and is being held without bail.

Zornberg was reportedly disbarred in 2006 for running a similar scam.  He was then sentenced to five year's probation.

Photo: Chris Potter


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