A Manassas woman pleaded guilty to wire fraud, mail fraud and money laundering in connection with her fraudulent ‘mortgage elimination scheme’ that cost victims more than $10 million, according to a press release issued by U.S. Attorney's Office for the Eastern District of Virginia.

 Linda Sadr, 51, of Manassas, Virginia was initially indicted on Nov. 23, 2010, by a federal grand jury on four counts of wire fraud, two counts of mail fraud and two counts of money laundering.

 U.S. District Judge Liam O’Grady accepted the plea, according to the announcement made by  U.S. Attorney Neil H. MacBride, and James W. McJunkin, assistant director in charge of the FBI Washington Field Office.

Sadr admitted  that between 2004 and 2008 she marketed a fraudulent investment scheme called the “Mortgage Elimination Program” by which she claimed to challenge lenders on the homeowners’ behalf, alleging she would eliminate their mortgages.  Sadr targeted homeowners by suggesting that lenders that refinanced loans were operating illegally by, ‘among other things, bundling the loans for resale and selling them to banks, which then used the loans as collateral to borrow additional funds,’ according to the release.

Sadr required her clients to refinance their mortgages with maximum cash-out refinance loans, taking a 10- to 15-percent cut of the cash-out loan as a fee for her services.  In addition, Sadr‘s clients were required to submit 12 to 18 months of advance mortgage payments to be held in ‘escrow,’ which Sadr claimed she would use to pay off the refinanced mortgages.

The defendant recruited new clientele by word of mouth from investors who believed their mortgages had been eliminated as a result of her work.  In actuality, Sadr repaid the mortgages by the cash-outs of subsequent clients. 

At the time of her indictment, homeowners lost more than $10 million in the scam.  None of the more than 150 participants received refunds of the fees Sadr charged or reconveyances on their homes indicating the mortgages were paid in full.

The FBI Washington field office investigated this case. Assistant U.S. Attorneys Marla Tusk and Jack Hanly were the prosecutors. 

Sadr faces a maximum penalty of 20 years in prison on each count of mail and wire fraud and 10 years in prison on each count of money laundering. 

She will be sentenced on May 6.