Man Pleads Guilty in Mortgage Fraud

A city man admitted yesterday in Camden federal court to taking part in a $40.8 million mortgage fraud scheme in which he helped find phony buyers for vacation properties in New Jersey and two other states.

William Brown, 60, pleaded guilty to conspiracy to commit wire fraud and conspiracy to commit money laundering. Authorities said Brown recruited “straw buyers” for his co-conspirators to purchase oceanfront condominiums overbuilt by financially distressed developers in Wildwood Crest as well as in vacation destinations in Georgia and South Carolina, and properties in New Jersey owned by financially distressed homeowners facing foreclosure.

Brown’s co-conspirators caused fraudulent mortgage loan applications and supporting documents to be submitted to mortgage lenders in the straw buyers’ names, attributing to them inflated income and assets in order to induce the mortgage lenders to approve the loans. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with the real estate closings on the properties, Brown’s co-conspirators took a portion of the proceeds from the fraudulent mortgage loans.

Brown’s take was  $96,000.

Charles Harvath, 33, of Lodi, and Stephen F. Corba, Jr., 36, of Farmingdale,  pleaded guilty on July 19, 2011, and August 3, 2011, respectively, to one count each of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Harvath, Corba, and their co-conspirators located distressed properties, recruited straw buyers, and created false documents in order to inflate the straw buyers’ qualifications as part of the scheme.

John Siuszko, 56, of Wharton,  and Michael Williams, 34, of Jersey City, had also pleaded guilty, on July 27, 2011, and August 16, 2011, respectively to wire fraud charges.

Siuszko and Williams served as straw buyers, who caused lenders to release almost $980,000 and $632,000, respectively, based on fraudulent mortgage loan applications.

The wire fraud conspiracy charge to which Brown pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. In addition, Brown agreed to forfeit his $96,000 in proceeds from the scheme.

He will be sentenced in July.