Hey, Where'd My Mortgage Go?

The mortgage market was crazy - so crazy that millions of dollars apparently could disappear and no one noticed for years. Or so it seems in the case of Steven Leff, the former president of the National Settlement Agency, who pleaded guilty to embezzling more than $13 million.

Federal prosecutors said that Leff, 45, was entrusted with mortgage refinancing proceeds while acting as a settlement agent for a number of FDIC-insured banks. The company's function was to disburse the proceeds to companies and individuals who sold and refinanced properties and to prior mortgage holders.

Instead, according to the government's complaint, Leff embezzled the proceeds of several refinance loans, which should have been used to pay off the outstanding principal amounts on the prior mortgages.

As part of his guilty plea in federal court in Central Islip, New York, Leff admitted that he stole more than $13 million in refinanced loan proceeds.

"In the midst of a mortgage refinancing boom, the defendant took advantage of hiss position as a trust agent of lender banks to embezzle mortgage loan proceeds for his personal gain," said Benton J. Campbell, U.S. Attorney for the Eastern District of New York.

Leff faces a maximum 30 years in prison when he is sentenced in September.

by Elizabeth Olson