Closing Agent Convicted for Role in Phony Mortgage Scam
Crystal Paling, 52, Hamburg, New Jersey, was convicted by a jury for her role in a wire fraud and money laundering scheme involving phony mortgages issued for properties in New Jersey and Florida.
The jury found Paling guilty of both counts charged in the Indictment against her: conspiracy to commit wire fraud and conspiracy to commit money laundering. The jury reached a decision following two hours of deliberation at the conclusion of a three-week trial before U.S. District Judge Peter G. Sheridan in Trenton, New Jersey, federal court.
According to documents filed in this case and the evidence at trial:
Paling acted as the closing agent for fraudulent mortgage loans orchestrated by her co-conspirators, Daniel Verdia, 54, Mahwah, N.J., Jaye Miller, 62, Pocono Lake, Pa., and Sandra Mainardi, 52, Wayne, N.J. The co-conspirators put together buyers and sellers in real estate transactions that they could control, then filed false and fraudulent loan applications containing inflated income figures for the borrowers. After mortgage lenders approved the loans, the defendant prepared and signed fraudulent settlement statements that falsely claimed the borrowers had made down payments or paid cash to close the loans.
Paling then wired loan proceeds due to the sellers from a trust account that she controlled to an account in the name of Capital Investment Strategies, a shell company owned by Verdia and Miller. She concealed illicit payments to Capital Investment Strategies by failing to disclose them on the settlement statements. She collected a portion of the disclosed closing fees that appeared on the settlement statements. She also received undisclosed kickbacks paid from Capital Investment Strategies to her own shell company, XL Partnership.
To further conceal the fraud, Paling retained some mortgage loan proceeds in the trust account and used them to pay back the mortgages on certain properties in order to keep the loans in good standing until the lender's buyback period expired.
Paling's conviction on the wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The money laundering count is punishable by up to 20 years in prison and a $500,000 fine. Sentencing before Judge Sheridan is currently scheduled for July 2, 2012.
Four other defendants originally charged in the scheme have pleaded guilty to related federal charges and are awaiting sentencing: Verdia and Miller, who each pleaded guilty to one count of conspiring to commit wire fraud and money laundering; Donald Apolito, 40, Elmwood Park, N.J., who pleaded guilty to tax evasion; and Robert Gorman, 63, Long Valley, N.J., who pleaded guilty to subscribing to false tax returns. Mainardi pleaded guilty in Florida federal court to one count of wire fraud and was sentenced to 46 months in prison.
U.S. Attorney Paul J. Fishman announced the conviction.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation under the direction of Acting Special Agent in Charge JoAnn Zuniga and special agents of the FBI under the direction of Special Agent in Charge Michael B. Ward in Newark for the investigation leading to today's conviction.
The government is represented by Assistant U.S. Attorneys Rachael A. Honig and Charlton A. Rugg of the U.S. Attorney's Office Criminal Division in Newark.
source: Mortgage Fraud Blog