U.D. man gets day in jail, must pay back $11M mortgage scam

PHILADELPHIA >> An Upper Darby man was sentenced Thursday to one day in jail, five years of supervised and to pay over $11.5 million in restitution for his role in a multi-million-dollar, fraudulent mortgage scheme, U.S. Attorney William M. McSwain announced Thursday.

David Fili Jr., 48, of the Drexel Hill section of the township, previously entered a guilty plea to 10 counts of wire fraud and two counts of bank fraud. He was sentenced Thursday by U.S. District Judge Joel H. Slomsky.

Along with George Barnard, 47, of Newtown Square, PA, Fili owned Capital Financial Mortgage Corporation (“CFMC”), based in Delaware County. Between 2005 and March 2013, Fili and Barnard issued refinance mortgage loans to customers of CFMC.

But instead of using the money to pay off their customers’ outstanding first mortgages, however, they diverted $9,781,977 to themselves from bank accounts belonging to CFMC and several title companies owned by Barnard. Barnard was previously sentenced to five years in prison for his role in the scheme.

As part of his guilty plea, Fili admitted that he used much of the money he diverted to buy a vacation home and to support his gambling habit, while Barnard used the money he diverted to buy multi-million dollar beach homes in Avalon, N.J., several yachts, and to pay the salary of a yacht captain. At the time that the scheme fell apart in March 2013, Fili and Barnard left over two dozen CFMC customers stuck with two mortgages on their homes because CFMC had failed to pay off their customers’ existing first mortgages.

“For many years, Fili defrauded honest, hardworking individuals out of their money so that he could gamble it away and relax in his illegally obtained vacation home,” McSwain said. “The defendant’s vacation ends now. We are thankful that the Court ordered him to pay millions of dollars as a result of his crimes.”

The case was investigated by the Federal Bureau of Investigation and the Department of Housing and Urban Development, Office of Inspector General, and was prosecuted by Assistant U.S. Attorney Michael S. Lowe.

“For many years, Fili defrauded honest, hardworking individuals out of their money so that he could gamble it away and relax in his illegally obtained vacation home. — U.S. Attorney William M. McSwain