2 arrested in sale of ‘mob’ house
Bull price in bear market a tipoffPeople in the state real estate industry were “scratching their head” after an associate of a late New England crime boss sold his “mess” of a house in a weak market for almost $1 million more than the asking price to two brothers now facing criminal charges, a police affidavit says.
Authorities on Thursday announced the arrests of Eugene O’Brien and Timothy O’Brien, who are accused of pulling off a $2.2 million fraud to buy the Narragansett home of Frederick Carrozza Sr., who ran a business from the same Providence office as the late reputed mob boss Raymond L.S. Patriarca.
Narragansett real estate agent John Hodnett wrote in an email two months after the September 2006 sale that the $2.4 million deal was one of the most “bizarre” transactions the market had seen in a while.
“This home has been on and off the market over the past 10 years between 595K and $1.5 (million). It was last on the market for $1.5 (million) this past February,” Hodnett wrote in an email quoted in the affidavit. “To see this close at $2.4 (million) with a mortgage (of) $2.28 (million) is mind boggling and turning all of the comps upside down. Most people are under the assumption that there may be more than meets the eye on this one.”
Investigators began looking into the sale of the home after the lender foreclosed last year, state police Lt. Michael Winquist said. A confidential source told authorities the sale price was suspicious and crimes may have been committed, he said.
Two area real estate agents told investigators the 4,900-square-foot home near a beach was in poor condition in 2006 and required “a lot of money and work,” the affidavit said. An attorney who offered to buy the property from Carrozza for $1.2 million called it a “mess” and planned to raze it, the affidavit said. A forensic appraiser determined the house was worth $910,000 when it sold, Winquist said.
Carrozza, who is not facing charges, made about $2 million in the sale, the affidavit said. He did not promptly return a message seeking comment Thursday.
Eugene O’Brien, who is from Somerset, Mass., and has worked in the mortgage industry, made more than $95,000 from purchasing and refinancing the property, and Timothy O’Brien, an acupuncturist from South Kingston, made $100,000, the affidavit said.
They’re each charged with obtaining money under false pretenses, conspiracy and money laundering.
When Eugene O’Brien secured new financing in December 2006, he did not disclose on his loan application that he had purchased three properties in Rhode Island and Massachusetts between Nov. 6 and Dec. 14 for more than $1 million total, the affidavit said. The properties fell into foreclosure.
http://www.telegram.com/article/20111230/NEWS/112309701
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