Guilty Pleas from the Subprime Mortgage Fallout Begin

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Law.com is reporting that three people have pleaded guilty to a multi-million dollar subprime mortgage scheme in the Southern District of New York.

Galina Zhigun and her son, Garri Zhigun, operators of the Brooklyn-based mortgage brokerage AGA Capital NY Inc., and Maryann Furman, an AGA employee and the wife of Garri Zhigun, entered guilty pleas to fraud charges before Southern District of New York Magistrate Judge Gabriel Gorenstein.

Accused of using false documents and straw buyers to obtain loans fraudulently, the three were among 26 people indicted in the subprime scheme. Friday's pleas bring to 11 the number of those who have pleaded guilty in the case. The remaining 15 defendants are scheduled to go to trial in two waves, the first on Nov. 17 and the second on Jan. 19.

When he is sentenced on Jan. 5, Garri Zhigun is expected to receive up to nine years in prison. He has agreed to forfeit a total of $2.5 million. His co-defendants are expected to receive between up to four years and three months in prison and each forfeit $1 million.

All three also face a minimum of $1 million in fines.

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