REAL ESTATE SWINDLERS GUILTY OF USING DEAD MAN'S NAME TO BUY HOME

Also pleading guilty, Paul DiGiacomo, 46, Madison, New Jersey, a lawyer who laundered stolen funds through his trust account and Nuno J. Sousa, 37, Union City, New Jersey.

Veras was a real estate agent and notary, helped prepare false loan documents for the scheme and forged signatures. She faces a recommended sentence of seven years in prison and a $150,000 fine. Stillwell was an employee of Ideal Title Agency, LLC, who helped prepare false closing documents.   She faces a sentence of up to seven years in prison and a $25,000 fine. Zullo was the owner of Ideal Title Agency, LLC. She admitted that she illegally distributed the loan funds as escrow agent. She faces a recommended sentence of up to three years in prison and a $150,000 fine.

Nunes, the mastermind of the scheme, acted as a principal of Leska Management, a bogus real estate management company. With Veras’ assistance, she arranged for the purchase of a home in Newark from a woman who had fallen behind in her mortgage payments. The seller owed $477,196 on her loan, but the holder of the mortgage, Kondaur Capital Corp., agreed to a “short sale” for $260,000 to a purported buyer identified by the defendants. A “short sale” is a pre-foreclosure sale where the mortgage holder agrees to permit the home to be sold for less than the amount due on the loan.

That sale was never completed. DiGiacomo, who held himself out as the attorney for both the buyer and Leska, told Kondaur the sale had fallen through. He then negotiated with Kondaur to assign the mortgage to Leska at a discounted price of $219,877. He never disclosed that, prior to assignment of the mortgage, the home was sold at an inflated price of $539,000 to a fictitious buyer created by the defendants. Nunes, with assistance from Sousa, a mortgage broker, fraudulently applied to Provident Funding Associates for a $431,200 mortgage loan and purchased the home using the identity of a deceased man whose last name was “Benazi.” Nunes created counterfeit bank records, employment records and false identification documents for Benazi for the loan application, and she had another man pose as Benazi at the closing. No payments were ever made to the lender on the loan. The seller was never notified of the closing, and her signature was forged on the closing documents.

Stillwell handled the closing for Ideal Title and assisted in the creation of false closing documents used to deceive the lender. She never collected monies due at closing from the buyer, and falsified HUD settlement statements to indicate that they had been collected and that the prior mortgage had been paid off. In her role as escrow agent, Zullo, the owner of Ideal Title, misappropriated loan proceeds by wiring $376,032 to DiGiacomo’s attorney trust account at Nunes’ direction. DiGiacomo used $219,877 of the misappropriated funds to pay for the assignment of the mortgage and wired the balance of $156,155, representing the net illegal profits, into a bank account controlled by Nunes and Veras. Stillwell, Zullo and DiGiacomo were all compensated for their participation in the scheme.

All six defendants who have pleaded guilty or entered PTI are required to pay restitution to the lender, Provident Funding Associates, equal to one-sixth of the $431,200 loan amount, or approximately $71,867 each.

Attorney General Jeffrey S. Chiesa made the announcement.

 “Home sales typically involve various professionals, including real estate agents, attorneys, title agents and mortgage brokers, who are responsible for providing multiple layers of review and oversight to prevent fraud,” said Attorney General Chiesa. “In this case, however, we had dishonest operators in every one of those roles, leading the unsuspecting lender to provide a $431,200 mortgage loan to a dead man. We will continue to work diligently to uncover such mortgage fraud schemes and send those responsible to prison.”

“In this troubled economy, we’re working hard to stop those who engage in financial fraud,” said Stephen J. Taylor, Director of the Division of Criminal Justice. “We’ve made it a priority to investigate and prosecute major white collar crimes, including complex mortgage fraud and money laundering cases.”

Deputy Attorney General Marysol Rosero took the guilty pleas for the Division of Criminal Justice Financial & Computer Crimes Bureau. Detective Sgt. Louis A. Matirko and DAG Rosero conducted the investigation and were assisted by Deputy Attorney General Michael Rappa, Special Agent Tanya Chavez, Office of Inspector General, U.S. Department of Housing and Urban Development, Special Agent Robert Manchak, Office of Inspector General, Federal Housing Finance Agency, and Division of Criminal Justice Interns Andrew Davenport, Brittany Kieran and Cara Ogulin.

source: Mortgage Fraud Blog