$30M Mortgage Fraud Scheme In North Jersey Busted: Prosecutors
Prosecutors: An attorney in Essex County and a real estate agent in Jersey City allegedly teamed up to run a massive mortgage fraud scheme.
Authorities arrested an attorney in Essex County and a real estate agent from Jersey City after they allegedly teamed up to run a $30 million mortgage fraud scheme that involved dozens of properties in North Jersey, prosecutors announced.
Police arrested Christopher Goodson, 44, of Newark, and Anthony Garvin, 47, of Jersey City, on Thursday morning for their alleged involvement in a large-scale mortgage fraud scheme that involved dozens of properties in Jersey City, Clifton, Union and other locations in New Jersey, according to the U.S. Attorney's Office (New Jersey District).
Authorities charged Goodson, an attorney, and Garvin, a real estate agent and investor, with one count of conspiracy to commit bank fraud.
According to prosecutors, from January 2011 to August 2017, Goodson, Garvin and other people engaged in a short sale mortgage fraud conspiracy targeting various New Jersey properties with mortgages that were in default.
Prosecutors did not name any suspects beyond Goodson and Garvin in their Thursday statement.
According to prosecutors, as part of the scheme, the conspirators arranged simultaneous fraudulent transactions on the same target property. In the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to accept the sale of the target property at a loss, usually to a buyer who was secretly a conspirator or an entity controlled by the conspiracy.
In the second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using false loan applications, pay stubs, bank account statements and title reports provided by members of the conspiracy. As a result, the second transaction frequently closed for significantly more or even double the price of the first transaction, prosecutors charged.
Goodson, Garvin and others allegedly rigged the short sale process at each step in order to maximize the difference in price between the two transactions and keep the victim financial institutions from detecting the fraud, prosecutors said.
"For instance, Goodson, an attorney, concealed the fact that he played multiple-roles in the short sale transactions, including allegedly generating false preapproval letters from a New Jersey corporation he owned that purported to be a short-term lending company operating out of California," prosecutors stated.
These letters were used to deceive banks into believing that the purchaser – typically a conspirator or entity controlled by Goodson – had the credit necessary for the transaction. Goodson also negotiated the fraudulent short sales with the banks, generated phony deeds that backdated the closing date of the first transactions, and even served as the closing attorney during some of the short sales, prosecutors alleged.
Garvin, a real estate agent and investor, allegedly coordinated fraudulent transactions as part of the scheme, prosecutors said.
The conspirators disbursed the funds into various accounts they controlled to conceal their illegal activities and split the profits. In total, the conspiracy defrauded financial institutions out of more than approximately $30 million, prosecutors said.
The conspiracy to commit bank fraud count is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine, according to prosecutors.
Article From:- https://patch.com