Lori Macakanja, Housing Counselor Who Stole From Underwater Homeowners, Gets Jail Time

02/03/2012 03:44 pm ET | Updated Feb 03, 2012

It's a Dickensian tale of fraud updated to the current day and its economic challenges.

A New York woman whose job was to help underwater homeowners in Buffalo avoid foreclosure stole $300,000 from them and gambled it away at casinos. Lori J. Macakanja, 36, Dunkirk, N.Y., was sentenced on Thursday to six years in jail and three years of supervised release and ordered to pay more than $298,000 in restitution to her 136 victims.

Macakanja had worked as a housing counselor for HomeFront, a Buffalo nonprofit that assists struggling homeowners. She told her clients that the money would be used for loan modifications but instead used it for gambling and diverted federal grant money to pay her own mortgage, according to the U.S. Attorney's office in Western New York. HomeFront fired her in late 2010.

Her massive scam has devastated the Buffalo community and tales of victims swindled by her continue to mount. Half the comments on stories about her case in the Buffalo News are detailed accounts written by victims.

"I remember telling her my story and how empathetic she acted, even shared conversation about our daughters, etc.," wrote Laurie Graham, who said she became unemployed as a result of a cervical injury.

Gina Hernandez, a mother of two juggling two jobs, wrote that Macakanja stole $5,600 from her after promising to modify her mortgage. Josette Saia, a single mother of two, said that her $5,000 fee had been stolen by the housing counselor.

And another woman with multiple sclerosis who uses a wheelchair and was about to lose her home ended up selling her deceased mother's wedding and engagement rings to raise the $2,670 for Macakanja. Then Macakanja promptly put it to her own personal use "Macakanja's clients usually experienced hardships, such as a job loss, divorce, illness [or] disability, which led to their inability to pay their mortgage," said federal postal inspector Shelley K. Carosella in the criminal complaint filed last year.

Officials with HomeFront, a well-respected organization founded in 1975, dismissed Macakanja and cooperated with federal investigators.

The prosecution was brought in coordination with President Barack Obama's Financial Fraud Enforcement Task Force.

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