CAMDEN, NJ—A Hudson County, New Jersey, man today admitted his role in a $13 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos in Wildwood and Wildwood Crest, New Jersey, U.S. Attorney Paul J. Fishman announced.

John Leadbeater,

58, of Kearny, New Jersey, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to a superseding indictment charging him with conspiracy to commit wire fraud. The plea came after the first week in what prosecutors and defense lawyers expected to be a lengthy mortgage fraud trial.

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

Leadbeater and the conspirators located for purchase condominiums overbuilt by financially distressed developers in Wildwood and Wildwood Crest, New Jersey. Leadbeater and his conspirators recruited “straw buyers” from New Jersey, New York, Ohio, Arkansas, and California, to purchase those properties. The straw buyers had good credit scores, but lacked the financial resources to qualify for the mortgage loans. The conspirators created false documents such as loan applications that contained fraudulent financial and employment information, to make the straw buyers appear more credit-worthy than they actually were in order to induce the lenders to make the loans.

To prepare the straw buyers’ false loan applications, Leadbeater and his conspirators caused fraudulent mortgage loan applications in the name of the straw buyers to be submitted to mortgage brokers that the brokers knew were false, attributing to the straw buyers inflated income and assets. Once the loans were approved, Leadbeater and his conspirators created and signed fraudulent closing documents in order to induce the mortgage lenders to send the loan proceeds in connection with real estate closings on the properties. Once the mortgage lenders sent the loan proceeds, Leadbeater and his conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to the other members of the conspiracy for their respective roles.

Leadbeater admitted to personally participating in fraudulent activity related to nine properties in Wildwood and Wildwood Crest. He admitted to causing mortgage lenders to fund $4,711,557 worth of mortgages based on false and fraudulent loan applications and closing documents prepared by him and his conspirators. As part of his guilty plea to the wire fraud conspiracy, prosecutors agreed to dismiss a charge of money laundering conspiracy.

Twelve of the conspirators not charged in the superseding indictment have already pleaded guilty to the mortgage fraud scheme.

On diverse dates in 2013, John Bingaman, 45, of Benton, Arkansas; Angela Celli, 42, of Somerset, Massachusetts; Deborah Hanson, 52, of Sewell, New Jersey; Robert Horton, 40, of Nashport, Ohio; Michelle Martinez, 50, of Brick, New Jersey; Ernesto Rodriguez, 46, of Brick; Dana Rummerfield, 48, of Los Angeles, California; Justin Spradley, 37, of Cincinnati, Ohio; and Paul Watterson, 54, of Maplewood, New Jersey, pleaded guilty before the Judge Simandle. In 2015, Sweet Briar Development Corp. of New Jersey; Joel Tirado, 51, of Woodbridge, New Jersey; and Diana Wisniewski, 45, of Kings Park, New York, pleaded guilty before Judge Simandle. All await sentencing.

The wire fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for June 26, 2015.

U.S. Attorney Fishman credited special agents from the FBI”s Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and special agents of IRS—Criminal Investigation in Mays Landing, under the direction of Special Agent in Charge Jonathan Larsen in Newark, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Jacqueline M. Carle and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden.