Susan Edge went through a painful divorce last decade and emerged with her tiny stone farmhouse on the edge of Quakertown nearly paid for and $142,000 in equity. Still, she had money problems and turned to a mortgage company for relief.
Today, the single mother of two has nothing.
She was among dozens of homeowners victimized by a group of "unscrupulous predators" – a well-heeled ring of white-collar professionals whose ranks included a self-confessed identity thief and a Doylestown Township supervisor. Nine years ago, the group used lies and forged documents to steal Edge's property. Edge, along with 34 other victims, saw their dream homes turn to financial nightmares.
Sentencing is finally at hand for the five people behind the $14.6 million equity-stripping fraud scheme. It's been more than two years since members of the group either pleaded guilty or were convicted by a jury. U.S. District Judge Mary A. McLaughlin is scheduled to rule Thursday on prison terms and restitution.
In stark contrast to Edge, two of those predators, Edward G. and Jacqueline McCusker, have remained in their $1.2 million, 6,700-square-foot McMansion.
The balustrades to the second floor balcony of their home near New Hope are crumbling from neglect - almost emblematic of the busted real estate boom of the mid-2000s that enriched many and left tens of thousands broke.
As a final insult to many of their victims, the McCuskers' defense has been courtesy of taxpayers. The couple has paid little for a marathon court case that spans the start of the recession through the nascent housing recovery. It is one of the longest running cases of its type that prosecutors and observers familiar with mortgage fraud cases can recall.
Meanwhile, Edge, 57, has struggled to stay in her five-acre homestead. During her nearly decade-long ordeal, she tragically lost a child and she was recently diagnosed with colon cancer. She's nearly given up all hope of remaining in the house, which has fallen into a state of disrepair.
"I'm not putting money into it because I don't own it anymore," she said.
"Equity skimming," also known as equity stripping, is a form of foreclosure relief fraud that became more prevalent during the housing bubble of the 2000s, in part because of banks' willingness to hand out money to anyone who asked. It is a complex process, with different variations.
In the case of the McCuskers' ring, two Doylestown bankruptcy attorneys would target people in financial straits and bad credit - but a good amount of equity in their homes. The attorneys would steer them to a mortgage company run by the McCuskers and John Bariana, who would, in turn, co-sign with homeowners for new mortgages.
Fraudulent paperwork was then prepared without homeowners' knowledge. The scammers would enter into a lease-buyback agreement with the original homeowners, who would agree to pay rent with the understanding that it would be used to pay off the new mortgage. But the McCuskers took the rent money, authorities say, and pocketed it.
In the mortgage rush of the mid-2000s, this particular case of equity skimming may have gone unnoticed were it not for the Pennsylvania Department of Banking, which was credited along with the U.S. Attorney's Office at the time of the indictments in 2009.
Susan Edge's house, now in the hands of a bank, is scheduled for auction at an upcoming sheriff's sale.
"Technically, we're squatters," she said.
Edge, a secretary for a roofing company, said her nightmare began in 2005 when her 17-year-old son was killed in an auto accident and the payment on her adjustable rate mortgage skyrocketed.
"I couldn't keep up with it," she said. "I got all kinds of mail from people saying they could help."
One of the offers of help came from an associate of Ed McCusker. Edge said McCusker co-signed with her to remortgage her house. She would pay the equivalent of rent. They would split the remaining equity and he'd return it to her when her credit was in better standing.
"That never happened," she said.
Before meeting Ed McCusker, Edge paid $1,450 a month mortgage payments. After entering into an agreement with McCusker, she initially paid $1,200 a month in rent. The monthly rent eventually ballooned to $3,000, she said, in an effort to get her to abandon the home.
Edge, with help from her boyfriend, paid the $3,000 for a year before falling behind. Unknown to her, McCusker's ring had kept the rent payments. She was threatened with eviction.
"They said they could fix things," Edge said. "They were going to keep half my equity and half was to be returned to me. Only there was no relief and they only fixed things for themselves."
Ironically, the McCuskers have remained in their residence, which is underwater.
That's because the federal government filed a motion stopping the home from being foreclosed on for now because it seeks forfeiture.
"If that hadn't been filed, the bank would have foreclosed three years ago and they would have been homeless," said Ed McCusker's attorney, Lynanne Wescott of Philadelphia.
The McCuskers also have the court to thank for their attorneys. Judge McLaughlin granted them a court-appointed defense. Wescott acknowledged that she makes the standard $125 an hour in the case under federal guidelines, but she declined to say how much total compensation she's received.
Philly.com has requested a total amount of fees paid during the four-year trial to Wescott and Hope C. Lefeber, Jacqueline McCusker's attorney. The court clerk's office has not responded.
Lefeber said the McCuskers do not have any real assets left. The McCuskers once operated a successful mortgage company, but that was in the years before they undertook what a jury found to be fraud.
Ed McCusker already had a criminal record before embarking on the equity skimming scheme. In a separate case in 2000, he pleaded guilty to forgery and identity theft.
In addition to his wife, the group in the more recent scheme included business partner John Alford Bariana and Jeffrey A. Bennett and Stephen G. Doherty, principals with the former Doylestown law firm Bennett & Doherty, P.C.
In February 2010, Doherty pleaded guilty in the scheme to criminal charges of conspiracy, mail and wire fraud and conspiracy to commit money laundering. Bennett, the former township supervisor, pleaded
guilty a week later. Bariana pleaded guilty in August 2010.
A jury found the McCuskers guilty of similar charges in June 2012.
For victims like Edge, there is little solace in excuses for the years-old trial and sentencing.
"It makes me sick to my stomach," Edge said. "We're just sort of lost, lost in the system."
Still, she counts her blessings. Her house was put up for sheriff's sale this past Valentine's Day in Doylestown and she wanted to take one last crack at keeping it.
"The opening bid was $235,000. I can't do that," she said. "Fortunately, no one bid on it, so I guess we lucked out for a little bit yet."
This story has been updated to note that Susan Edge had nearly paid off her home, and not fully paid off as originally stated.