Dive Brief:

• Mark Sosso, owner of Sosso Homes in Sarasota, FL, pleaded guilty to a count of conspiracy in federal court Friday in connection with a $2.4 million bank fraud scheme.
• The scheme also reportedly involved Sosso's childhood friend Joseph Nocito Jr. — president of Castle Mortgage in McCandless, PA. 
• Nocito, who already pleaded guilty in March to bank fraud conspiracy and filing a false tax return in relation to the scheme, will be sentenced in October. Sentencing for Sosso has been set for January.

Dive Insight:

According to prosecutors, Sosso had purchased a partially built property in Florida in 2005 and completed the home with a loan worth $1.6 million from Liberty Savings Bank. After he was unable to sell the house for several years, however, he asked Nocito to help him crawl out of debt.

Nocito then sent paperwork claiming he would buy the property to a different bank, Washington Mutual, to secure an even larger loan. The home was then advertised for sale by the realty company owned by Mark Sosso's brother, Scott Sosso, according to TribLive. That bigger loan was used to pay back the original $1.6 million loan owed to Liberty Savings. In return, Sosso gave nearly $460,000 to Nocito in kickbacks, and Nocito failed to report that money to the IRS.

The scheme resulted in a loss of $1.8 million for Washington Mutual Bank after Nocito defaulted on the loan.

Nocito is the son of Joseph Nocito Sr., a developer who is also under investigation by the IRS and other government agencies. Joseph Nocito allegedly used revenue from his companies to build himself a 28,000-square-foot mansion in Bell Acres, PA, but deducted the cost of construction as business expenses.

Officials have recently been cracking down on corrupt developers and construction executives who use illegal business practices for their own gain. Last month, the Manhattan DA launched a task force to identify and prosecute corruption in New York City's construction industry.