Eight people involved in a nearly a two-year mortgage fraud scheme that caused losses of over $30 million were charged with conspiracy to commit bank fraud and money laundering.
According to a complaint filed in Newark, N.J. federal court, the defendants conducted their scam from September 2006 to May 2008 through a company called Premier Mortgage Services.
The conspirators targeted properties in low-income areas of New Jersey. After recruiting straw buyers to participate in this scheme to purchase these properties, the defendants prepared fraudulent documents to make it appear as though these buyers possessed more assets and made more money than they really did.
The defendants submitted these false documents as mortgage loan applications to financial institutions. Based on these documents, the lenders approved the straw buyers for mortgage loans.
However, the defendants split the proceeds from these mortgages among themselves by using fraudulent HUD-1 settlement statements, which hid the real destinations of the mortgage funds provided by the lenders. Once the money was deposited in bank accounts they controlled, the defendants transferred the cash among various other accounts. Each transaction was greater than $10,000, the compliant said.
As part of this scam, there was no intention for the straw buyers to ever pay the mortgage on the properties, which resulted in many of the assets entering the foreclosure process. The conspirators defrauded financial institutions out of more than $30 million.
The defendants involved in this scheme included Lester Soto, a part owner of Premier Mortgage Services; Michael Rumore, an attorney who aided the fraud by performing closings on many of the properties involved in the scheme; Linda Cohen, a paralegal who closed on the transactions; Issac DePaula, Adilson Silva, and Klary Arcentales, who were loan officers at PMS; Antonio Pimenta, the owner of Kelmar Construction Co. which built properties sold to the straw buyers utilizing fraudulent mortgage loans brokered by Arcentales; and Rodrigo Costa, who created false and fraudulent documents including Verifications of Deposit and Verifications of Rent.
Federal Bureau Investigations officials have arrested six of the defendants. Only DePaula and Costa are still at large.
The criminal complaints charge each of the defendants with one count of bank fraud conspiracy, which is punishable by a maximum penalty of 30 years in prison and a fine of $1 million. Furthermore, Cohen, Pimenta, Soto, DePaula, Silver and Rumore are also each charged with one count of money laundering and could go to prison for an additional 10 years and be forced to pay $250,000 in restitution.
