Former attorney, official sentenced for mortgage fraud

Former attorney, official sentenced for mortgage fraudFormer attorney, official sentenced for mortgage fraud
Saturday, May 21, 2011
By Rich Lord, Pittsburgh Post-Gazette
Once a Pine supervisor, former attorney Daniel Sporrer slid into the business of mortgage fraud, and now he has been sentenced to two years and three months in prison.

At a sentencing hearing Thursday, U.S. District Judge Nora Barry Fischer said Mr. Sporrer "should've known better." As an attorney, he was "an extension of the courts, and that brings a higher calling and a higher duty for you. You also served as an elected official."

That same public service, though, was a factor in her decision to send him to prison for less time than the 41 months to 51 months suggested by federal sentencing guidelines.

Mr. Sporrer, 47, now of Richland, said he was sorry, while also pointing fingers at mortgage broker Robert Arakelian, of Pittsburgh Home Loans, who pleaded guilty to fraud in 2009 but hasn't yet been sentenced.

Mr. Arakelian, he said, persuaded him to create Summit Settlement Services, a title firm owned by brokers. Mr. Arakelian, he said, also urged him to hire Karen Atkison, who also has pleaded guilty to fraud and awaits sentencing. Mr. Arakelian also connected him to Riverside Mortgage, another firm whose employees have been charged criminally.

Those relationships started in 2006, as Mr. Sporrer was easing out of nearly a decade of public service in Pine, first as a planning commissioner, then as a supervisor. In the 1990s, he was a Bellevue commissioner.

At the same time, his alcohol abuse was clouding his judgment, and his marriage was drifting toward divorce, Mr. Sporrer said.

He started doing the legal work for loans to new homeowners with extremely low credit scores and no ability to make down payments. He helped to falsify facts to trick lenders, according to the wire fraud charge to which he pleaded.

"You slide into it," Mr. Sporrer told Judge Fischer. "Before you know it, you throw up your hands and go along for the ride." He said he thought he was doing the borrowers a favor when really he was setting some up for foreclosure.

Mr. Sporrer said he fired Ms. Atkison in mid-2007 and stopped dealing with Mr. Arakelian. He continued to do business with Riverside Mortgage.

When a Secret Service agent showed up at his office in 2009, he said, he answered all questions and provided boxes of documents. Last year, he gave up his law license.

Judge Fischer ruled Mr. Sporrer helped cause more than $1 million in damages to lenders, investors and borrowers. She ordered him to pay $624,395 in restitution to three banks and potentially more to other victims if they are identified.

Rich Lord: rlord@post-gazette.com or 412-263-1542.

First published on May 21, 2011 at 12:00 am