Federal prosecutors said Wednesday that a New Jersey real estate developer and an attorney admitted their roles in a mortgage fraud scheme that caused more than $3.5 million in losses.
The US Attorney’s Office released a statement alleging that developer Victor Santos, aka Vitor Santos, 63, of Watchung, and lawyer Fausto Simoes, 69, of Millington, conspired with two individuals to obtain over $4 million in mortgage loans fraudulently.
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The office claims that Santos and Simoes lied to the lender by posing as the “straw buyers” who purchased 12 residences in Newark using the identities and credit of the straw buyers.
Authorities claim that Santos and others paid at least $5,000 to each straw purchaser, secured tenants to lease the properties, and paid all property-related expenses, including closing costs and mortgage payments on the fraudulently obtained mortgages.
Conspirators sent mortgage companies phony loan applications and supporting paperwork.
The office claims that Simoes closed on 10 of the phony deals and aided in the spread of the falsehood by receiving the necessary closing payments from a shell business run by Santos and another conspirator despite initially indicating that the straw buyers were supplying the cash.
Simoes concealed from the lender that a large portion of the loan proceeds was going to a shell business owned by Santos and another conspirator in multiple transactions.
Federal prosecutors allege that the conspirators made the straw buyers accountable for making mortgage payments not long after they had purchased the residences.
They defaulted on their mortgage payments because they lacked the funds to do so, costing the lender, Fannie Mae, and the insurers a combined total of more than $3.5 million.
Officials reported that in 2017, Santos, Simoes, Arsenio Santos (both of Warren), and Raquel Casalinho (of Union) were charged for their roles in the conspiracy. Both Arsenio Santos and Casalinho have worked in the construction and mortgage industries.
The office said that on April 2, 2019, Victor Santos and Simoes pled guilty in federal court in Trenton, New Jersey to conspiracy to commit bank fraud. After entering guilty pleas, Arsenio Santos and Casalinho were awaiting sentencing.