Nine people allegedly involved in a long-running, large-scale mortgage fraud scheme that caused losses of approximately $10 million were recently charged with conspiracy to commit bank fraud.
Paul Chemidlin Jr., 41, of Morganville; Delio Coutinho, 50, of Colonia; Joseph Di- Valli, 44, of Jackson; Christopher Ju, 26, of East Brunswick; Carmine Fusco, 44, of East Hanover; Jose Luis Salguero Bedoya, 36, of Elizabeth and Verona; Jose Martins, 31, of Newark; Yazmin Soto-Cruz, 32, of Elizabeth; and Kenneth Sweetman, 32, of Lyndhurst and Nutley, were arrested on Jan. 24 by FBI special agents, according to a press release from U.S. Attorney Paul J. Fishman. According to the complaints, from March 2008 to July 2012, the defendants allegedly engaged in multiple mortgage fraud conspiracies targeting at least 15 properties in and around Newark and Elizabeth, including obtaining control of properties through fraudulent “short sale” transactions, short sale flips and identity theft.
They reportedly submitted materially false mortgage loan documents to lenders in order to obtain loan proceeds, which the defendants then allegedly used for their own financial gain. They also allegedly obtained money through various sales to straw buyers, the release said. From March 2008 to June 2010, the press release states, Salguero, Coutinho, Ju and Soto allegedly conspired with each other, among others, to release liens on encumbered properties via fraudulently arranged short sale transactions which allowed the defendants to profit from the new fraudulent mortgage loans obtained on the properties from other mortgage lenders.
The defendants reportedly submitted materially false closing documents and other documents to mortgage lenders, as well as materially false mortgage loan applications to mortgage lenders to obtain new mortgage loans on properties in and around Elizabeth on Fulton Street.
From March 2011 to July 2012, Salguero, Chemidlin, DiValli, Fusco, Martins and Sweetman submitted false mortgage loan applications to mortgage lenders for a property on Smith Street, Elizabeth, according to Fishman.
The defendants allegedly submitted gift letters to mortgage lenders that falsely stated the borrower was obtaining the funds necessary to close the real estate transaction in the form of a gift, whereas the funds used as the borrowers’ down payments were actually provided by Salguero, the release said.
The defendants also allegedly submitted false appraisal reports, formed limited liability companies in order to open bank accounts to conceal the defendants’ identities and submitted fraudulent documents that misrepresented Salguero’s ownership in various properties and the disposition of mortgage loan proceeds related to various transactions. The men then allegedly distributed the fraudulently obtained proceeds to themselves and others, and concealed those distributions by failing to include them in settlement statements, Fishman said.
The criminal complaints charge each defendant with one count of conspiracy to commit bank fraud, which is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million.