EXCLUSIVE TO NEW YORK & NJ – U.S. Attorney Philip R. Sellinger said on Wednesday that a developer from Somerset County and an attorney from Morris County had each guilty of conspiring to conduct a mortgage fraud scheme that resulted in losses of more than $3.5 million.
Via videoconference with U.S. District Judge Michael A. Shipp in Trenton, New Jersey, Victor Santos, aka Vitor Santos, 63, of Watchung Borough, and Fausto Simoes, 69, of Millington, pled guilty to conspiracy to commit bank fraud, according to Sellinger.
Read more:Â Big News for New Jersey Drivers: Announce Widening of Atlantic City Expressway!
From September 2007 to November 2008, real estate developer Santos and attorney Simoes allegedly collaborated with each other and others to fraudulently obtain mortgage loans with a total value of over $4 million, as evidenced by documents presented in this case and testimony made in court.
Santos planned and executed a scheme in which 12 Newark properties were purchased by straw buyers. This scheme allowed Santos, Simoes, and their accomplices to conceal their identities as the actual buyers of the properties by using the identities and credit of these straw buyers to fool the lender.
By promising each straw buyer at least $5,000, finding tenants to lease the properties, and paying all associated costs (including fees related to the real estate purchases and mortgage payments on each fraudulently obtained mortgage), Santos and others were able to convince many people to act as straw buyers for their fraudulent mortgage schemes.
Read more: Astronomers Have Captured the First Glimpse of Our Galaxy’s Black Hole| View the Latest News!
Mortgage lender losses due to fake loan applications and supporting papers submitted by Santos, Simoes, and others.
In ten of the fraudulent transactions, Simoes oversaw the closings and contributed to the spread of the fraud by falsely claiming that the straw buyers were providing the cash needed at closing when, in reality, he had obtained the funds from a shell company controlled by Santos and another conspirator.
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.
Santos and his associates failed to keep their word and pay the mortgages on the properties soon after they had purchased them.
As a result of the illegally obtained mortgages defaulting on their payments, the lender, Fannie Mae, and insurers lost a total of more than $3.5 million.
The mortgages were obtained in the names of straw buyers who lacked the financial resources to make the required monthly payments.
Read more:Â New York State is the First to Temporarily Prohibit Cryptocurrency Mining.
The maximum penalty for bank fraud conspiracy is 30 years in jail and a fine of $1 million or twice the defendants’ gross gain or twice the victims’ gross loss, whichever is greater.
On April 12, 2023, Santos will be sentenced, and on April 13, 2023, Simoes will do the same. Two more conspirators have pled guilty and are currently awaiting punishment.
