Former Mortgage Lender Gets 21 Months for Fraud

A former employee of a Parsippany mortgage lender who admitted to taking nearly $140,000 in illegitimate proceeds from multiple home sales through a mortgage fraud scheme was sentenced Tuesday morning to 21 months in prison, the U.S. Attorney's Office said.

Jorge Abbud, 33, of Dover, had previously pleaded guilty to wire fraud charges. In addition to the prison term, U.S. District Judge William H. Walls sentenced Abbud to three years supervised release and ordered him to pay restitution of $138,402 to the defrauded lender, Bank of America, the U.S. Attorney's Office said.

While an employee of a Parsippany mortgage lender in 2008, Abbud admitted he targeted New Jersey homeowners who "had equity in their homes, but were facing foreclosure because of their inability to pay their monthly mortgage payments," according to a statement released by U.S. Attorney Paul J. Fishman's office.

The name of the mortgage lending company was not released.

According to the U.S. Attorney's Office, Abbud falsely promised to help these homeowners to avoid foreclosure, keep their homes and repair their credit.

Abbud told homeowners to "permit the titles of their homes to be recorded in the names of third-party purchasers for approximately one to three years, promising the homeowners that he would improve their credit scores during that time, obtain mortgages with more favorable interest rates for them and return the titles of the homes to the homeowners," the U.S. Attorney's Office said.

Abbud admitted having the third-party purchasers, or "straw buyers," act as buyers of the homes facing foreclosure, the U.S. Attorney's Office said. The straw buyers were told they would make money when the homes were sold back to the original homeowners, the U.S. Attorney's Office said. In some instances, the homes fell into foreclosure, the U.S. Attorney's Office said.

Abbud admitted to having the straw buyers misrepresent their income in loan applications and other documents in order to secure the loans to purchase the homes, the U.S. Attorney's Office said.

"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," the U.S. Attorney's Office said.

"Abbud personally obtained $138,402 in illegitimate proceeds of the home sales as a result of his scheme and artifice to defraud."