LOS ANGELES—A former Bank of America employee was sentenced this morning to 30 months in federal prison for

taking more than $1.2 million in bribes to approve artificially low-price short sales

of properties on which the bank held mortgages.

Kevin Lauricella, 29, of Thousand Oaks,

was sentenced by United States District Judge Otis D. Wright II.

In addition to the 2½-year prison term, Judge Wright ordered Lauricella to pay $5.7 million restitution to Bank of America and to forfeit his residence, which had been purchased with some of the bribe money.

In January, Lauricella pleaded guilty to two felony charges—receiving bribes and making false entries in the bank’s books and records. The fraudulent short sales that Lauricella approved in return for the bribes resulted in at least $5.7 million in losses to the bank. The fraudulent short sales also clouded the title on the properties, which in turn resulted in expensive litigation for innocent parties, including individuals who purchased the homes later.

Lauricella worked in the Short Sale Department of Bank of America’s Simi Valley office in 2010 and 2011. He was responsible for negotiating short sale transactions, in which a lender allows property securing a mortgage or deed of trust to be sold for less than the existing loan balance, usually because the borrower can no longer make the payments due on the loan or because the fair market value of the property has dropped below the balance due. By approving the short sale, the lender agrees to release the lien on the property securing the mortgage even though the lender will receive less than the full amount owed.

In return for bribes—which were paid by various individuals who purchased the properties so they could be “flipped”—Lauricella used his position to “approve” short sales that he was not authorized to approve and that were for sales prices far below the fair market value of the subject properties. Lauricella then made false entries in Bank of America’s computer system to make it appear that Bank of America had approved the short sales for the below-market prices. When he pleaded guilty, Lauricella admitted approving fraudulent short sales for at least nine properties.

The case against Lauricella is the result of an investigation by the Federal Bureau of Investigation.

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