CONCORD – A number of local residents will be part of the fraud trial of a former Nashua resident.

Federal prosecutors filed a list of 49 people they intend to call during Michael Prieto’s mail fraud and money laundering trial, set to begin Tuesday at U.S. District Court in Concord.

Prieto is facing 11 charges and is accused of leading a mortgage fraud scheme that bilked dozens of homeowners and lenders from 2005 to 2007.

Prieto was scheduled to go to trial late last month but then filed a motion to plead guilty. That hearing replaced what was originally scheduled to be jury selection. But then Prieto changed his mind about that, too, and the trial was delayed once again, since the potential jurors had been sent home.

The trial has been postponed multiple times – at least partially due to the large number of documents and records entered as evidence – since the scheme was uncovered by law enforcement officials.

Proceedings for several codefendants ended in guilty pleas. Several of those codefendants are on the prosecution’s witness list, including Walter Bressler, Richard Winefield and Sadie Ng.

Local residents on the witness list include Nashua residents Harold Hellinger, Sarah McGregor, Dean and Patricia Palanski and John and Darlene Wilmot; Merrimack resident Marjorie Carmichael; Hudson resident Larry Nickerson; Bedford residents Gary Bernier and Andrew Sullivan, as well as Jeffrey Walsh of Hollis and Lucia Williams of Pelham, according to court documents.

The witness list does not specify what the witnesses’ connection is to the case.

Also testifying will be FBI financial analyst Christopher Gizzi, which is a matter of contention.

Prieto’s attorney, Michael Iacopino, filed a series of motions earlier this month to block certain evidence and testimony. He has asked the judge to not let Gizzi testify about charts and spreadsheets he prepared that analyze a huge amount of bank and mortgage transactions. The so-called “summary evidence” would unfairly prejudice the jury, according to court documents.

In their objection to that motion, prosecutors included several charts Gizzi produced, including one that show payments made to straw buyers, another that lists checks connected to fraudulent transactions to Prieto’s business account, and a chart showing properties involved in the alleged mail fraud, according to court documents.

One of the charts shows that banks lost nearly $5.7 million and another shows about $540,000 deposited or cashed into Prieto’s accounts, according to court documents.

Iacopino also asked the judge to bar the prosecution from using the words victim or scheme, claiming that is a matter for the jury to decide since Prieto has long said the intent of his business was to help struggling homeowners, not to defraud them.

A third motion asks the judge to bar testimony about the amount of money allegedly lost by banks. Those figures are “irrelevant” to Prieto’s guilt or innocence and should only factor into his sentencing hearing if he is found guilty, according to documents. Prosecutors filed an objection to that motion as well.

Investigators say Prieto coordinated a complicated mortgage scheme from offices in Manchester, controlled a number of employees and agents, and identified struggling homeowners to target. Prosecutors say dozens of New Hampshire homeowners were targeted, including at least one in Nashua.

Prieto has long maintained he was running a legitimate program to help homeowners. It wasn’t a scam, he has said in previous interviews, but a refinancing program intended to help. He claimed it would have done so if homeowners had paid their agreed-upon rent.

“The agreement and the program … was not a scam,” Prieto previously told The Telegraph. “It was designed for its purpose, which was helping people pay off their debts, giving them breathing room, giving them an opportunity to stay in their homes for two years.”

Prosecutors claim Prieto and others sought out homeowners who were having trouble making ends meet and offered to buy the property, take over the loan and rent the home back to the homeowners. They also contracted to let the homeowner buy the home back later, at a higher price, although no homeowner was ever able to do so, Assistant U.S. Attorney Michael Gunnison said.

Meanwhile, and without the homeowners knowing it, he said, the conspirators were flipping the homes, selling them at inflated prices to bogus straw buyers who had taken out much larger loans.

Those larger loans paid off the original mortgages and were then defaulted on while the difference was pocketed, often amounting to tens of thousands of dollars, according to court documents.

Bressler was sentenced to 14 months in prison, Winefield received probation, and Stanhope Ng received probation and a house arrest term. Bressler and Winefield were ordered to pay a total of about $3.57 million in restitution, police said.

Joseph G. Cote can be reached
at 594-6415 or jcote@nashua
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