The co-owner of a mortgage company responsible for a large-scale fraud scheme was sentenced to 21 months in prison in a Newark, N.J., federal court on Thursday.
Lester Soto, 59, of Freehold, N.J., was sentenced by U.S. District Judge Esther Salas after he previously pleaded guilty to two counts of conspiring to commit bank fraud. In addition to the prison term, Judge Salas ordered Soto to serve five years of supervised release and pay restitution of $3.7 million.
According to the U.S. Attorney's Office for New Jersey, from September 2006 to May 2008, Soto engaged in two related mortgage fraud conspiracies through a company called Premier Mortgage Services. He and his co-conspirators targeted properties in low-income areas of New Jersey using straw buyers.
They used fraudulent documents to make it appear as though the straw buyers possessed far more assets and income than they actually did. These documents were submitted to financial institutions as part of mortgage loan applications, which relied on them to provide financing for the subject properties.
Soto and his conspirators then split the proceeds from the mortgages using fraudulent settlement statements that hid the true sources and destinations of the funds. The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings.
Besides being a part-owner of Premier, Soto also acted as a loan officer on certain Premier mortgage loan applications and took a percentage of its profits. Besides having people create the fraudulent documents, he put mortgage brokers at Premier in contact with them to create more of the fake papers. Soto instructed Premier employees to provide him with loan files they believed contained suspicious information, and then personally shepherded these loan files through to funding.
Those charged as conspirators include Isaac DePaula, 36, of Brazil; Adilson Silva, 50, of Union, N.J.; Rodrigo Costa, 35, of Brazil; Michael Rumore, 57, of Toms River, N.J.; Antonio Pimenta, 48, of Neshanic Station, N.J.; Klary Arcentales, 47 of Lyndhurst, N.J.; and Linda Cohen, 58, of Orange, N.J.
Arcentales, one of the loan officers who provided fraudulent documents to financial institutions on behalf of straw buyers, was sentenced to 18 months in prison on March 28. Cohen, a paralegal who served as the settlement agent on mortgage loans brokered by Arcentales for various properties, was sentenced to six months in prison on March 30.
