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DA: Imprisoned LI Fraudster Wanted Witness Killed


Aaron Hand, president of AFG Financial Group., Inc., appears in a New York courtroom after he was indicted on charges of enterprise corruption and grand larceny, in connection with a mortgage fraud scheme involving at least $102 million, Wednesday, July 8, 2009. (AP Photo/Pool, Mariela Lombard)

A former Oyster Bay Cove man convicted of leading a $100 million mortgage fraud scheme tried from behind bars to get a key witness against him killed, plotting his revenge in a prison visiting area with an undercover investigator posing as a hit man, prosecutors said Thursday.


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Former AFG Financial Group Inc. President Aaron Hand got the supposed contract killer money to buy a gun, issued detailed instructions — including how to make the murder look like a gang attack — and agreed to pay $2,000, Manhattan prosecutors said.

“I wish I was there to … watch him suffer,” Hand told the investigator in a recorded conversation at the prison, according to prosecutors.

Wearing a green prison jumpsuit, Hand pleaded not guilty to attempted murder and conspiracy charges. His lawyer said authorities had set Hand up.

“He never wanted to hurt anyone, to kill anyone,” attorney Kevin Canfield said. “He’s going to fight as hard as he can.”

The witness, whom prosecutors wouldn’t name, was one of several who cooperated with them and testified against Hand to outline a sprawling scheme in which a cast of corrupt mortgage brokers and lawyers pocketed money that banks lent people to buy real estate, duping both sellers and buyers along the way.

Some 27 people have been convicted or pleaded guilty. Hand, 39, was convicted in July 2010 of racketeering and other charges. He was sentenced in September 2010 to 8 1/3 to 25 years in prison.

“The case itself was filled with rats. Big-time. One — one got me pretty … good,” Hand fumed to the investigator when they met in August at Coxsackie Correctional Facility in New York’s Hudson Valley, according to prosecutors. “You don’t get a free pass in life when you put away 30 … people.”

Authorities had gotten a tip earlier that Hand was interested in arranging a hit, so they sent the undercover investigator his way, prosecutors said.

Hand laid out a detailed plan, telling the supposed hit man to block the witness’s driveway so he couldn’t escape, to kill the man’s wife and children if they were home at the time, to wear gloves and to leave no DNA, prosecutors said.

To get the investigator $150 to buy a gun, Hand told his parents and an associate he needed to bribe a prison guard to avoid being transferred to an undesirable cell, prosecutors said.

“He involved his loved ones unknowingly in a murder conspiracy,” Manhattan Assistant District Attorney Peirce Moser said.

Then the undercover investigator visited Hand again Sept. 15, saying he’d gotten the gun, had followed the witness a few times in preparation and was ready to go — and there would be no turning back once he left the prison that day, prosecutors said.

Hand told him to do it, prosecutors said. Having decided it would be better not to kill the witness at his home, Hand advised the investigator to paint gang symbols on the intended victim’s car so the murder would seem gang-related, prosecutors said.

Hand could face 25 years to life in prison if convicted of the new charges, first reported Thursday by The Wall Street Journal.

“There is a misperception that white-collar criminals cannot also be violent criminals — but they can be,” District Attorney Cyrus R. Vance Jr. said in a statement.

The witness was one of the 27 people who pleaded guilty or were convicted in connection with AFG Financial Group, prosecutors said, but they declined to discuss the outcome of the witness’s case.

The Garden City, N.Y.-based company found real estate owned by people in financial trouble and then found straw buyers who had good credit — but needed cash — to front for the purchase of the property, prosecutors said. The buyers were told the deals were investment opportunities that would help people save their homes, earn them and investors a healthy return, and cost them nothing but their signatures.

The conspirators would then get banks to finance the real estate purchases, with the help of inflated property appraisals, phony loan qualification packages and forged W-2 forms, pay statements and bank documents. Once the deals closed, the conspirators simply took the money, without paying the seller or anyone else, prosecutors said.

The straw buyers were left with bad credit and no investment return, and the lenders foreclosed on the sellers’ properties.

In some cases, the banks had already sold investments based on the worthless mortgages. Cheated banks and lenders included New Century Mortgage Corp., which lost more than $30 million, and Countrywide Home Loans Inc., which was taken for about $8 million, prosecutors said.

AFG Financial Group was not related to American Financial Group, of Cincinnati, an insurance company that goes by AFG.

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Follow Jennifer Peltz at http://twitter.com/jennpeltz.

Copyright 2011 The Associated Press.

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