Massive Mortgage Fraud In Queens: NYC Media Ignore It

Back in 2007, I wrote three posts on an unbelievably sleazy criminal, one Thomas Kontogiannis.

I contacted the news rooms at several local papers, including the Times, the Daily News, the Post, and a paper or two in Queens. Nothing but crickets in response. This is no boring story: Tommy K is now in prison for bribing California GOP Congressman Duke Cunningham. This was HUGE news on the West Coast - but not a single column inch of coverage here in NYC. Why?

Via Talking Points Memo, Reuters has a story up on Kontogiannis's $92 million dollar mortgage fraud. Maybe this contributed to Queens foreclosure rates dwarfing those of every other borough.

Real estate developer Thomas Kontogiannis, 60, and eight other defendants are accused of orchestrating fraudulent loans that were subsequently sold to the financial firms.

Federal prosecutors and the FBI said the scheme was centered around property developments that Kontogiannis bought and subdivided from 2001 to 2003 in the New York City boroughs of Brooklyn and Queens.

To finance the projects, the defendants are accused of staging sales of the properties financed by mortgage loans. Bogus appraisals supported the price of the properties, even where buildings had not yet been constructed or had fictional addresses, said the U.S. Attorney's Office in Brooklyn, which is prosecuting the case.

The Daily News failed to cover any aspect of this story, except for this mention in an article about tax delinquents:

Federal prosecutors who indicted Long Island financier Thomas Kontogiannis for laundering bribes to California Rep. Randy (Duke) Cunningham tied him to at least 22 companies including Westshore 480 Development, which, the city says, owes $751,708 in taxes on a waterfront property in Brooklyn.
A lawyer for Kontogiannis denied his client owned Westshore 480 or owed money for its property taxes. "He has no ownership and no liability," lawyer Robert Wolf said. "It would not be accurate to report that he does."

Apparently this guy was also involved in some shady business with spy agencies. All the more reason local papers should take an interest in an investigative story - but so far, no takers. What gives?

Queens Sleaziest, Part II: Thomas Kontogiannis

Disgraced and imprisoned felon/former Congressman Duke Cunningham (R - Alcatraz) has apparently begun to cooperate after a year in the slammer.

And that means more juicy details on Queens connection to one of the most egregious bribery scandals in US history: Thomas Kontogiannis.

Some choice tidbits:

The FBI stated that:

More than $1 million in bribes was laundered by being sent to Kontogiannis instead of going directly to Cunningham. Investigators identified at least 70 bank accounts maintained by Kontogiannis at one bank.

Despite his many businesses, Kontogiannis has not filed a tax return since 2001.

For the first time, investigators shed light on what Kontogiannis expected to get from Cunningham – help on a potential sale of fighter jets to his native Greece.

The Rolls-Royce that drew so much attention early in the investigation was not the only car that Cunningham made the contractors buy for him. In only two days in early 2002, the congressman bought a $43,000 Thunderbird and a $41,000 BMW from Bob Baker Ford in San Diego with $63,000 of his payment coming from bribes. That was three months before Wade gave him $10,000 toward the used Rolls-Royce.

In mid-2004, when Cunningham needed to make repairs to his boat, he called Wade and demanded $6,500 in cash. Wade took the money out of his petty cash, stuffed it into a bulging envelope and rushed it over to a Cunningham fundraiser at a Washington restaurant, giving it to a Cunningham staffer.

In his prison interviews with investigators, as summarized by the FBI, the former congressman is reported to have:

Openly “recalled exerting pressure on government officials” to reward his bribers.

Said Wilkes told him he was “hiding money in a bank account in Panama” to pay him bribes.

Spoke of having had to find ways to get around objections from Sen. Richard Shelby, R-Ala., and Rep. Duncan Hunter, R-El Cajon, both of whom tried to block Cunningham's spending projects for Wade and Wilkes as wasteful and unneeded.

FBI Affidavit (pdf)
FBI Transcript (pdf)

What will it take for our local press to get interested in this story?