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Weysan Dun, Special Agent in Charge of the FBI’s Newark Field Office, called the defendants “opportunistic thieves.”
“To swindle people out of the roofs over their heads is just deplorable,” Dun said.
Six people are charged with wire fraud, following a joint investigation that the two federal agencies dubbed “Operation Follow the Money.”
The ringleader was Daniel Verdia, 51, owner and operator of several mortgage brokerage companies since 2001, federal agents said.
One of those, Capital Investment Strategies, was listed as operating out of the same Route 17 office in Hasbrouck Heights as one of Verdia’s other firms but was actually “a shell company used by Verdia and his associates to fraudulently conceal money,” according to a complaint filed in Newark.
After fraudulently obtaining five mortgage loans in 2005, Verdia and his alleged crew “converted the proceeds of those loans to their own use,” the complaint says.
“This was done by first misrepresenting to the buyers and sellers the terms of the mortgage financing the purchase, the disbursements of the mortgage proceeds, and the source of the proceeds to pay off the mortgages, among other details,” federal authorities said.
“The second phase of the fraud involved falsifying information on the mortgage loan applications — namely the income and assets of the purchasers on the loans, the source of the down payments on new purchases, and the disbursements of cash related to the mortgage proceeds” through wire transfers, they said.
“In the end,” agents said, “the only people who made a profit” were Verdia and his co-defendants:
Jaye Miller, 50, who has actively worked with Verdia since 2000 and has functioned as a loan officer and loan processor within Verdia’s companies. Miller was also a 50% owner of CIS and endorsed checks made out to that entity — monies that were allegedly proceeds of fraudulent activity, federal agents said.
Robert Gorman, 60, who also has worked in many of Verdia’s businesses. Gorman obtained information from the mortgage applicants and processed the applications. This involved knowingly signing and submitting applications with false information, according to the allegations.
Don Apolito, 37, who has done business with Verdia since 2002 and operated a number of companies that supplied warehouse lines of credit that funded Verdia’s alleged fraudulent transactions. All three of the companies operated by Apolito -Nina Funding, Matrix Funding, and the Mortgage Exchange, were operated out of Verdia’s Hasbrouck Heights office, the FBI said. Additionally, the complaint alleges that Apolito also served the same function as Gorman: knowingly signing and submitting loan applications with false information
Philip Blanch, 69, an attorney who closed all of questionable loans.
“It was [Blanch’s] responsibility to ensure the legality of the transactions and to verify the accuracy of the information in the closing documents and disbursement of funds. Blanch did this by signing the federal Uniform Settlement Statements (HUD-1) forms involved in the transactions. However, the complaint alleges Blanch was well aware that information he ‘verified’ on the HUD-1 statements was false.
Crystal Paling, 49, who worked for Blanch and, according to the federal complaint “recruited individuals to purchase and sell the properties that were the subjects of fraud in this case.” The complaint also alleges that Palings authored many of the documents associated with these transactions and facilitated the wire transfers to and from Blanch’s trust account.
Two of the homeowners were financially strapped because of medical expenses. They and the other victims were convinced to either sell or refinance their homes as part of a foreclosure bailout scheme, federal authorities allege.
Verdia’s crew then recruited straw buyers who were promised $5,000 for their participation and told that the original owner would buy back the home once they could afford it, the complaint says.
The defendants reassured the buyers that Verdia’s company would pay the mortgages until then, it says.
At that point, authorities said, the defendants began producing false applications to outside mortgage lenders.
“Once the loans were approved, the mortgage lenders wired funds to Blanch’s attorney trust account,” the FBI said. “At Blanch’s direction, Palings, would then wire all or most of the proceeds to CIS as a fee or payment.”
Two of the victims got a fraction of what they were owed. The other, although being led to believe he as refinancing, had sold his home for a 100 percent loss.
“These types of financial crimes add to the underground economy, erode the integrity of our tax system, and threaten the financial health of our communities,” said Julio LaRosa, Acting Special Agent in Charge of the IRSS’s Criminal Investigations unit in Newark.
“We will continue to work closely with our law enforcement counterparts at the FBI to investigate” such schemes, LaRosa said.
All of the defendants remain free on bond and could face addition charges, authorities said. The case is being prosecuted by Assistant U.S. Attorney Sharon Ashe.
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