David Saks: MAN PLEADS GUILTY TO $3 MILLION MORTGAGE FRAUD SCHEME

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

MAN PLEADS GUILTY TO $3 MILLION MORTGAGE FRAUD SCHEME

New Jersey Man Admits $3 Million Mortgage Fraud Scheme

Jerry Smith, 45, Scotch Plains, New Jersey, admitted to conspiring to participate in a mortgage fraud scheme that caused lenders to release approximately $3 million based on fraudulent loan applications and conspiring to launder the proceeds of the fraud.

Smith pleaded guilty to an Information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. He entered his guilty plea before U.S. District Judge Jerome B. Simandle in Camden federal court.

According to documents filed in this case and statements in court:

Smith’s co-conspirators located oceanfront condominiums built by financially distressed developers in Wildwood Crest and North Wildwood, N.J., as well as other properties in New Jersey owned by financially distressed homeowners facing foreclosure. Smith and his coconspirators recruited straw buyers to purchase those properties. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. Smith’s coconspirators created false documents, such as fake W-2 forms, pay stubs, bank statements, retirement account statements, and cancelled rent checks, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.

The co-conspirators caused fraudulent mortgage loan applications in the name of the straw buyers and supporting documents to be submitted to mortgage lenders. The mortgage loan applications were false in that they attributed to the straw buyers 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 real estate closings on the properties, the co-conspirators took a portion of the proceeds by having funds wired or checks deposited into various accounts that they controlled.

The wire fraud conspiracy charge to which Smith pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge to which Smith also pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine. In addition, Smith agreed to forfeit $378,687.53 representing the amount of proceeds obtained as a result of the offense. Sentencing before Judge Simandle is scheduled for March 23, 2011.

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 the IRS-Criminal Investigation in Mays Landing, under the direction of Special Agent in Charge Victor W. Lessoff, with the 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.

Courtesy Mortgage Fraud Blog




David Saks



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Comment balloon 0 commentsDavid Saks • December 21 2011 04:08AM

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