East Meadow Attorney Charged With Stealing $700K in Two Real Estate Scams

Powell acted as middle man for two bridge loan deals, lenders never received their money

MINEOLA, NY – Nassau County District Attorney Kathleen Rice announced today that an East Meadow real estate attorney has been charged with grand larceny after stealing $700,000 from two investors who provided funds for bridge loans.

Frederic Powell, 53, of East Meadow, is charged with two counts of Grand Larceny in the Second Degree. If convicted, he could face up to 15 years in prison.

Rice said that in February 2007, Powell acted as the middle man between a real estate investor and a client who was looking for a bridge loan of $250,000. The investor provided the client with the money, and was told that Powell would forward him a years worth of monthly interest checks, and the principal of the loan when the client obtained a new mortgage. The monthly checks, however, began to arrive sporadically after a year. When the investor asked Powell to send the client a default letter in August 2008, thinking that the client was not repaying his loan, it was discovered that the client had already repaid the entire loan, and that Powell had kept the money.

Rice said that in October 2006, mother and son real estate investors fell victim to a similar scheme. Joined by another real estate investor putting up identical money, the mother and son put up $225,000 for a bridge loan of $450,000 to a client looking to expand his Manhattan business. Powell, acting as the deal’s middle man, told the investors that they could expect monthly payments. In the beginning of 2008, the checks were not coming, and the second investor requested to be bought out. The mother and son bought out the second investor and were now on the hook for the entire $450,000. They soon learned that the client had repaid the entire loan to Powell, who had kept the money.

“This gross misconduct and unfathomable greed will be aggressively prosecuted by my office,” Rice said. “Mr. Powell will now have to face the consequences of his actions.”

Assistant District Attorney Victoria Curran of the DA’s Government/Consumer Frauds Bureau is handling the case for the District Attorney’s Office. Powell is being represented by Joseph Girardi, Esq.

The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.