BANGOR – A former Massachusetts man, who once was proclaimed on a television infomercial as a real estate success story, was sentenced Wednesday to 11 months in prison for masterminding a real-estate “flipping” scheme in Washington County.
Jeffrey Leggee, 32, was ordered to complete three years of supervised release upon the conclusion of his prison term.
The father of three young children, Leggee has been jailed since June when agents with the Federal Bureau of Investigation descended on the Down East community of Milbridge to gather evidence against Leggee and a partner. Leggee reportedly left the community within minutes of the FBI’s arrival He was arrested a few days later in Florida.
In September, Leggee pleaded guilty to six counts listed in a complaint. They are one count of mail fraud, one count of using a false name in a mail-fraud scheme, two counts of wire fraud, one count of using a false Social Security number and one count of conspiracy to commit wire fraud and mail fraud.
Leggee will get credit for time served, which means he could be freed in about five months. A slender man with dark hair and glasses, Leggee apologized for his actions in court Wednesday.
Leggee claims to have bipolar disorder and has been prescribed medication for the ailment. After the midmorning hearing, he was handcuffed and taken to jail.
U.S. District Judge George Z. Singal presided at the hearing at U.S. District Court. He termed the crime “not a lapse in judgment but a well-thought-out scheme.” He said Leggee had betrayed a basic trust that is a foundation of functioning in this society.
As a result of “taking advantage” of certain procedures in the world of real estate, he has made it more difficult for others, the judge said. “Honest folks will have to jump through more hoops” and do more paperwork to get a loan because of Leggee’s actions, Singal said.
Singal ordered Leggee to pay $57,459 in restitution to one of the companies he dealt with in the scheme.
As part of the scheme, Leggee reportedly set up a fake corporation called Christian Family Homes. The business bought property from local owners then created false appraisals inflating the land value before selling it to secondary mortgage companies.
One of those companies, FSB Mortgage of Arkansas, filed suit against Leggee and his wife, claiming they lost hundreds of thousands of dollars as a result of the scheme. A motion for a default judgment is pending in the civil lawsuit.
Leggee’s wife and mother attended the hearing in a show of support. They did not speak at the hearing, but appeared to wipe away tears as Leggee was handcuffed and led away.
The scheme involved the purchase of four properties – three in Cherryfield and one in Milbridge – and creating false appraisals that inflated the value of the properties as much as 15 times their worth, before reselling the mortgages to a secondary mortgage company.
An alleged partner in the scheme, John Hahnl, 36, will be sentenced after the holidays. He is charged with conspiracy to commit wire fraud and conspiracy to commit mail fraud. He remains released on bail.
At an earlier hearing, Hahnl’s attorney said his client was a victim in the case. Attorney Charles Hodsdon of Bangor said last June Hahnl, a former successful car dealer in Massachusetts, became involved after he watched an infomercial on television on real estate success stories.
The television spot apparently reported Leggee was a success story. The piece inspired Hahnl, who got in touch with Leggee and eventually followed him to Maine.
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