Attorney Pleads Guilty to Bank Fraud Involving Greenwich Mortgage Refinancing

A 43-year-old Fairfield attorney pleaded guilty Friday to bank fraud because of his handling of a mortgage refinancing of a home in Greenwich, according to an announcement from David B. Fein, U.S. Attorney for Connecticut.

Fein's announcement says Brian P. McManus, who had a law practice in New Haven, waived his right to indictment and entered the plea before Senior U.S. District Court Judge Ellen Bree Burns in New Haven.

According to Fein's announcement, McManus engaged in fraudulent transactions in his capacity as the closing attorney on real estate transactions. McManus failed to pay off existing mortgages on properties involved in real estate transactions in a timely fashion and illegally used mortgage funds that had been deposited into his Interest on Lawyers Trust Account for other purposes, Fein's announcement says.

In July 2008, McManus handled a real estate closing that involved the refinancing of a residential property in Greenwich. At the time of the closing, the property had an outstanding mortgage of about $2 million that was to be paid off using funds provided by a different lender as part of the refinancing transaction, Fein's announcement says.

But McManus, rather than paying off the existing mortgage on the Greenwich property, used more than $1.45 million of the new mortgage monies that had been transferred to his IOLTA to pay off outstanding mortgages from prior, unrelated real estate transactions he had handled; to make monthly payments on the outstanding Greenwich mortgage loan that was to have been paid off in full; and to pay personal and business expenses, according to Fein's announcement.

Burns has scheduled sentencing for Sept. 9, and McManus faces a maximum term of imprisonment of 30 years and a fine of up to $1 million, according to Fein's announcement.

McManus has withdrawn from the practice of law and the Connecticut Superior Court has appointed a trustee to oversee the closing of his practice, Fein's announcement says.

The case was investigated by the Federal Bureau of Investigation.