Loan Officer Admits To Participating In Large Scale Mortgage Fraud Scheme | USAO-NJ


NEWARK, NJ – A loan officer at a mortgage company today admitted his role in a long-standing, large-scale mortgage fraud scheme, acting U.S. lawyer Rachael A. Honig said.

Isaac DePaula, 41, pleaded guilty before U.S. District Judge Esther Salas of the Newark Federal Court to Count 1 of an indictment accusing her of conspiring to commit bank fraud. DePaula was a longtime fugitive who was indicted by a criminal complaint in 2012 and an indictment in 2016. He returned to the United States in March 2020 to face the indictment charges.

From documents filed in this and other cases and statements made in court:

From September 2006 to September 2010, DePaula and his conspirators engaged in a large-scale, long-term mortgage fraud conspiracy through a mortgage company called Premier Mortgage Services (PMS). The conspirators targeted properties in low income areas of New Jersey. After recruiting straw buyers, the defendants used a variety of fraudulent documents to give the impression that the straw buyers owned a lot more assets and earned a lot more income than they actually did. The defendants then submitted these fraudulent documents in connection with mortgage applications from financial institutions. Based on these fraudulent documents, the financial institutions granted mortgages for the properties in question.

The defendants then split the mortgage proceeds between themselves and others using fraudulent settlement statements (HUD-1), which obscured the true sources and destinations of the mortgage funds provided by financial institutions. The defendants made false statements and provided fraudulent documents when in fact the straw buyers had no way of paying off the mortgages on the properties in question, many of which started foreclosure proceedings.

Defendants played different roles in the scheme, and others indicted and convicted included a co-owner of PMS, a lawyer who aided in the fraud by carrying out closings on many of the properties in question, an accountant who created false documents. , the owner of a real estate development company, several loan officers and a paralegal for another lawyer who also entered into fraudulent transactions.

DePaula was a loan officer at PMS and recruited straw buyers, provided false and fraudulent documents to straw buyers, and incorporated false and fraudulent documents into loan applications to trick financial institutions into financing mortgages. Loan officers illegally profited by receiving a commission from PMS for every mortgage they closed, and also profited illegally by embezzling some of the fraudulently obtained mortgage proceeds for themselves, often through shell companies. or nominee bank accounts.

The offense DePaula pleaded guilty to carries a potential maximum sentence of 30 years in prison and a maximum fine of $ 1 million. The judgment is scheduled for April 19, 2022.

Acting US Attorney Honig credited the FBI Special Agents, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and Special Agents of the Federal Housing Finance Agency – Office of the Inspector General, under the direction of Special Agent in Charge Robert W. Manchak, with the investigation leading to today’s guilty plea .

The government is represented by Acting Deputy US Principal Prosecutor Rahul Agarwal.

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