A father and son were sentenced in Newark, N.J., federal court for running a fraudulent foreclosure rescue company that obtained $4.4 million in mortgage loans.
Just a few weeks ago, another family foreclosure rescue scheme came to a halt as two California brothers were found guilty for also operating a bogus foreclosure rescue scam.
In the latest mortgage fraud scheme, court documents and statements stated that between January 2008 and February 2010, as president of Morgan Financial Equity Shares and Vanick Holdings LLC, both based in Holmdel, N.J., Vito Grippo told distressed homeowners at-risk of foreclosure to participate in the Equity Share Program.
Through this program, Grippo and his associates told homeowners that a limited liability company would be created in the name of the homeowner’s house, but they would supposedly own a 90% interest with the rest owned by one or two private investors.
In reality, the so-called investors invested nothing and were really straw buyers recruited by Grippo or his son, Frederick Grippo, because they had good credit. Then, the Grippos applied for mortgages in the names of these “investors” to purchase the properties owned by the distressed homeowners.
The scam was successful because homeowners signed papers that they thought were going to help them prevent foreclosure, but they were really transferring titles of their properties to the investor.
Additionally, the new mortgage loan applications filled out by the Grippos in the name of the investors contained false information about the applicant’s monthly income, assets, and the primary intent to live in the residence.
These applications were then submitted to Worldwide Financial Resources, where Frederick Grippo worked as a loan officer, which would guarantee that the loans were approved. Once this happened, the money was wired to the settlement agent for a specific transaction who was then directed by Vito Grippo to forward a portion of the loan proceeds to bank accounts he controlled.
Victims of the Equity Share Program scam whose properties lost money lived in Rutherford and Monroe, N.J., as well as Brooklyn, N.Y.
Court documents also revealed that Vito Grippo did not report $289,780 in gross income for the activities of Vanick Holdings for 2006. This also occurred for the next two years, as he withhold gross income of $213,261 and $1.3 million for 2007 and 2008, respectively.
Vito Grippo was sentenced by U.S. District Judge Kevin McNulty to eight years in jail. He previously pleaded guilty to one count of conspiracy to commit wire fraud, two counts of filing a false tax return for the years 2006 and 2007, and one count of aiding and procuring the filing of a false tax return for 2008.
Meanwhile, Frederick Grippo has to serve 41 months in prison after pleading guilty to an information charging him with one count of conspiracy to commit wire fraud.