EX-AFG CEO Hand Plotted to Kill Witness, Prosecutor Says

A man convicted for his role in a fraudulent $100 million mortgage scheme, former AFG Financial Group Inc. chief executive officer Aaron Hand, was charged with plotting to kill a witness who testified against him.

Hand, 39, sentenced in 2010 to as long as 25 years in prison, today was arraigned in New York State Supreme Court in Manhattan on two counts of attempted murder in the first degree, one count of attempted murder in the second degree and one count of conspiracy to commit murder. He faces four and half years to life in prison if convicted.

“The motive for this attempted murder was revenge, plain and simple,” Manhattan District Attorney Cyrus R. Vance Jr. said in a statement.

Hand pleaded not guilty, and his lawyer, Kevin Canfield, said his client was entrapped by the police.

Hand was the mastermind of a mortgage scheme that defrauded Bank of America Corp., Wells Fargo & Co. and other banks, according to Vance’s office, which said it won convictions against all 27 people charged.

In August, an investigator with the district attorney’s office received a tip that Hand, while incarcerated at New York State Coxsackie Correctional Facility, was attempting to arrange the murder of a witness who testified against him during a nine-week trial in July 2010, according to the statement.

Explicit Detail

Based on this evidence, an undercover investigator from the district attorney’s office was sent to meet with Hand on Aug. 26, posing as a “hitman,” according to Vance’s statement. Hand instructed the agent to kill the witness, who hasn’t been identified, Assistant District Attorney Peirce Moser said in court today. The witness was a cooperating defendant.

Recorded conversations show Hand lied to his friends and family to secure money to pay for the hit, prosecutors said.

Hand described in explicit detail how he wanted the murder to take place, including using a car that would block the driveway and a rear entry to the would-be victim’s home, Moser said in court today.

“No samples, no DNA, wear gloves,” Hand instructed the person he thought was a hit man, Moser said.

Hand told the undercover investigator he wanted the witness killed because the case “was filled with rats. Big time,” according to court documents. “You don’t get a free pass in life when you put away thirty (expletive) people,” Hand told the undercover investigator.

Wife, Children

Hand also told the undercover investigator to kill the witness’s wife and two young children and offered the house the witness was living in as a reward, saying he owned it, according to prosecutors.

Co-conspirators and accomplices in the case caused banks to front millions of dollars to buy distressed residential properties in and around New York City, according to prosecutors. They then walked away with most of the cash, leaving behind over-valued properties and worthless mortgage papers.

AFG Financial and the individuals were charged with corruption, grand larceny, fraud and conspiracy. The defendants included Garden City, New York-based AFG Financial’s principals and a number of employees, in addition to property locators, appraisers, recruiters of straw buyers, bank employees and lawyers.

Fraudulent Applications

AFG Financial had submitted fraudulent mortgage applications to lenders such as Countrywide Financial Corp. and New Century Mortgage Corp., according to a statement issued by former district attorney Robert Morgenthau in July 2009.

The mortgages were securitized and sold into the secondary market as collateralized debt obligations, Morgenthau said. CDOs parcel fixed-income assets such as bonds or loans and slice them into new securities of varying risk intended to provide higher returns than other investments of the same rating.

The case is People v. Aaron Hand, 4870/2011, New York Supreme Court (Manhattan).

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