5th Defendant Admits Role in Straw Buyer Scam
William Brown, 60, Newark, N.J., a fifth man admitted his role in a $40.8 million mortgage fraud conspiracy, recruiting "straw buyers" to purchase real estate properties in New Jersey, South Carolina, and Georgia and causing lenders to release more than $18 million based on fraudulent mortgage loan applications.
Brown pleaded guilty to an Information charging him with conspiracy to commit wire fraud and conspiracy to commit money laundering. He entered his guilty plea before Senior U.S. District Judge Joseph E. Irenas in Camden federal court.
According to documents filed in this case and statements made in court:
Brown recruited "straw buyers" for his co-conspirators to purchase oceanfront condominiums overbuilt by financially distressed developers in Wildwood Crest, N.J., premier real estate in vacation destinations in Georgia and South Carolina, and properties in New Jersey owned by financially distressed homeowners facing foreclosure. Brown's co-conspirators caused fraudulent mortgage loan applications and supporting documents to be submitted to mortgage lenders in the straw buyers' names, attributing to them inflated income and assets in order to induce the mortgage lenders to approve the loans. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with the real estate closings on the properties, Brown's co-conspirators took a portion of the proceeds from the fraudulent mortgage loans.
Brown also admitted that he and his co-conspirators laundered the proceeds of the mortgage fraud by having some of those proceeds transferred to the recruiters and straw buyers. Brown received $96,000 for his role.
Charles Harvath, 33, Lodi, N.J., and Stephen F. Corba, Jr., 36, Farmingdale, N.J., pleaded guilty on July 19, 2011, and August 3, 2011, respectively, to Informations charging them each with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Harvath, Corba, and their co-conspirators located distressed properties, recruited straw buyers, and created false documents in order to inflate the straw buyers' qualifications as part of the scheme. Sentencing for Harvath is currently scheduled for June 25, 2012; sentencing for Corba will be set by the Court.
John Siuszko, 56, Wharton, N.J., and Michael Williams, 34, Jersey City, N.J., also pleaded guilty on July 27, 2011, and August 16, 2011, respectively to Informations charging them with conspiracy to commit wire fraud. Siuszko and Williams served as straw buyers, who caused lenders to release almost $980,000 and $632,000, respectively, based on fraudulent mortgage loan applications. Sentencing for Siuszko is currently scheduled for June 5, 2012, and sentencing for Williams is scheduled for June 7, 2012.
The wire fraud conspiracy charge to which Brown pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. In addition, Brown agreed to forfeit $96,000, representing the amount of proceeds obtained as a result of the offense. Sentencing for Brown is currently scheduled for July 19, 2012.
U.S. Attorney Paul J. Fishman announced the guilty plea.
U.S. Attorney Fishman credited special agents from the FBI's Atlantic City Resident Agency, under the direction of Special Agent in Charge Michael B. Ward in Newark; and special agents from IRS – Criminal Investigation in Mays Landing, under the direction of Acting Special Agent in Charge JoAnn S. Zuniga, with the ongoing investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney R. Stephen Stigall of the U.S. Attorney's Office Criminal Division in Camden.
source: Mortgage Fraud Blog