While practicing as a real estate
lawyer in Somerville and Medford, Carey engaged in a scheme called
"mortgage stacking" on four residential properties he or his family
members owned. The scheme involved serially refinancing the loans on
these properties, without paying off the existing loans. Carey was also
the agent for a New England title insurance company which allowed him
to issue title insurance policies on mortgage transactions he
processed. Title insurance policies protect lenders in the event that
there are defects in the title of the property.

On various
occasions between April 2002 through September 2004, Carey performed
the functions of closing attorney on mortgage loans on each of the
properties involved. Carey "stacked" three mortgages on a home in
Medford, two mortgages each on two different properties in Everett, and
one mortgage on his personal residence in Medford. Carey also falsified
information on mortgage loan applications by omitting certain mortgages
on the various properties, and also signed a family member's name on
false mortgage applications and closing documents he created. When he
received the proceeds of the loans, Carey did not pay off the existing
mortgages on these properties, but rather used the funds for his own
benefit. Carey issued title insurance policies or commitments in
connection with the transactions, and the lenders were therefore
protected, but ultimately the title insurance company suffered the
financial loss. As a result of this scheme Carey stole over $2 million.

The
lenders remained unaware of the problem because Carey continued to make
monthly payments on all of the loans. In November 2005, a database
search by Fannie Mae flagged the multiple mortgages on one of the
properties, triggering a notification to one of the lenders. The lender
then notified the title insurance company of the problem. Lawyers for
the title insurance company then referred the matter to the Attorney
General's Office in March 2006.

A Middlesex Grand Jury
returned indictments against Carey on August 21, 2008. On September 12,
2008, Carey was arraigned in Middlesex Superior Court at which time he
entered a plea of not guilty and was released on personal recognizance.
Carey entered a change of plea to guilty in Middlesex Superior Court on
September 28, 2009. Today, Carey was sentenced in Bristol Superior
Court, where Superior Court Judge D. Lloyd MacDonald was presiding.

This
case was prosecuted by Assistant Attorney General Margaret Parks of
Attorney General Martha Coakley's Corruption and Fraud Division, and
was investigated by State Police assigned to the Attorney General's
Office and Investigator Carl Mullen of Attorney General Martha
Coakley's Financial Investigations Division. Postal Inspector Daniel
Bonda of the United States Postal Inspection Service also assisted in
the case.