A Long Branch man is one of 10 people charged in a $40 million mortgage fraud scheme that was busted by the FBI and IRS.
Isatu Tejan-Sie, 54, of Long Branch helped recruit straw buyers to purchase oceanfront condominiums overbuilt by "financially distressed" developers, properties in resort destinations in South Carolina and Georgia and other properties in New Jersey, U.S. Attorney Paul J. Fishman said in a release.
Tejan-Sie was a loan representative at CitiFinancial Bank in Long Branch, according to the indictment.
Tejan-Sie, Joseph Witkowski, 66, of Flemington, Catherine Pearson, 53, of West Orange and Crystal Brame, 42, of Irvington all recruited straw buyers including George Lachenmayr Jr., 79, of Irvington, Aku I. Muhammad, 42, of Newark, Mark Kreischer, 33, of Elmwood Park, and Marc Jacobs, 47, of Hackettstown to purchase the properties.
A mortgage broker, Robert Serao, 46, of Bayville also has been charged.
Every person charged, with the exception of Brame, have been arrested and are expected to appear in federal court in Camden Thursday afternoon before U.S. Magistrate Judge Joel Schneider.
The 10 defendants have been charged with conspiracy to commit wire fraud and Witkowski has also been charged with conspiracy to commit money laundering.
The wire fraud conspiracy charge 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.
"The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans," Fishman's release states. "The conspirators, including Pearson, created false documents such as fake W-2 forms, income tax returns, and investment statements 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, Witkowski and his conspirators allegedly caused fraudulent mortgage loan applications in their names, including the supporting documents, to be submitted to mortgage brokers.
The mortgage brokers, including Serao, allegedly knew the applications and documents were false. This attributed to the straw buyers inflated income and assets.
"Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Witkowski and his conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled," the release states.
They also allegedly distributed a portion of the proceeds to other members of the conspiracy for their respective roles.
Many of the conspirators not charged in the indictment have already pleaded guilty to the mortgage fraud scheme.
Charles Harvath, 33, of Lodi, Stephen F. Corba, Jr., 36, of Farmingdale, and William Brown, 60, of Newark, pleaded guilty on July 19 and Aug. 3, 2011, and April 5, 2012, respectively, to Informations charging them each with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.
Harvath, Corba, and others located distressed properties, recruited straw buyers, and created false documents in order to inflate the straw buyers’ qualifications as part of the scheme.
Sentencing for Brown is currently scheduled for Sept. 6 and sentencing for Harvath and Corba has not yet been scheduled.
John Siuszko, 56, of Wharton, and Michael Williams, 34, of Jersey City, also pleaded guilty on July 27, 2011, and August 16, 2011, respectively, to Informations charging them with conspiracy to commit wire fraud. Siuszko and Williams served as straw buyers, causing the lender to release almost $980,000 and $632,000, respectively, based on fraudulent mortgage loan applications.
Siuszko was sentenced on June 25, 2012, to 18 months in prison, to be followed by two years supervised release and was ordered to forfeit $40,000 and pay a $5,000 fine. Williams' sentencing has not yet been scheduled.