An Orange, N.J., paralegal has pleaded guilty to participating in a mortgage scam that cost defrauded financial institutions at least $2 million, according to the Federal Bureau of Investigation and U.S. attorney Paul J. Fishman.
Linda Cohen, 55, pleaded guilty to one count of conspiring to commit bank fraud and one count of transacting in criminal proceeds in U.S. District Court.
Conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. Transacting in criminal proceeds carries a maximum potential penalty of 10 years in prison and a fine of $250,000 or twice the gross amount of any gain or loss.
Sentencing is set for November.
According to documents filed in this case and statements made in court, Cohen handled real estate closing for an attorney licensed in New Jersey and acted as the settlement agent for fraudulent mortgage loans brokered by another conspirator in Lyndhurst, N.J., on behalf of a mortgage company.
“As closing agent, Cohen furthered the scheme by convening closings, receiving funds from lenders, and preparing HUD-1 reports that purported to reflect the sources and destinations of funds for mortgages on subject properties. Those HUD-1s were neither true nor accurate,” according to the FBI. “Cohen routinely certified HUD-1s in which she purported to have received a downpayment from the buyer when no downpayment had been made.”
Cohen then would disburse the proceeds to the mortgage company, the attorney and the Lyndhurst conspirator, who created shell bank accounts where the proceeds were funneled.
