Crime & Safety
Former Mortgage Lender Employee Pleads Guilty to Fraud
Court records indicate he collected $138,402 from mortgage fraud scheme.
A former employee of a Parsippany mortgage lender admitted today to taking $138,402 in illegitimate proceeds of multiple home sales as a result of a mortgage fraud scheme, U.S. Attorney Paul J. Fishman announced.
Jorge Abbud, 33, of Dover, pleaded guilty in Newark federal court Thursday to a charge of wire fraud.
The charge carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross amount of any pecuniary gain or loss resulting from the offense.
According to court documents and statements, the scheme took place in 2008, when Abbud was an employee of a Parsippany mortgage lender. Abbud admitted that he targeted homeowners in New Jersey who had equity in their homes but were facing foreclosure because of their inability to pay their monthly mortgage payments.
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Abbud falsely promised to help these homeowners avoid foreclosure, keep their homes and repair their damaged credit. He instructed the homeowners to permit the titles of their homes to be recorded in the names of third-party purchasers (known as “straw buyers”) for approximately one to three years. He also promised the homeowners that he would improve their credit scores during that time, obtain mortgages with more favorable interest rates and return the titles of the homes to the homeowners, according to court documents.
Abbud said he then recruited “straw buyers” with good credit scores to act as buyers of the homes facing foreclosure. He told the “straw buyers” they were helping the homeowners keep their homes and that they would make money when the homes were sold back to the original homeowners.
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Abbud admitted that, on certain occasions, the homes fell into foreclosure.
Abbud also admitted that he sometimes caused the “straw buyers” to misrepresent their incomes in loan applications and other documents in order to secure the loans to purchase the homes.
Abbud caused the funds disbursed by the financial institution or lender underwriting the loan to be sent to individuals and entities that were not legally entitled to them. As a result of the scheme and artifice to defraud, Abbud personally obtained $138,402 in illegitimate proceeds of the home sales.
Abbud is scheduled to be sentenced on April 17, 2012.
