New Jersey AG accuses trio in labyrinthine $1million mortgage fraud

by Ryan Smith07 Sep 2016
The New Jersey attorney general says three people carried out an elaborate mortgage fraud and identity theft scheme that allowed them to steal nearly $1 million from various lenders.

Attorney General Christopher S. Porrino announced last week that Artis Hunter, 49, and Melissa Phillip, 41, had been arrested on charges of money laundering, conspiracy, identity theft and theft by deception. A third person, Laquan Jones, 42, was being sought as a fugitive on the same charges.

Hunter was the alleged ringleader of the group, which the AG says used stolen identities to scam more than $930,000 from lenders through at least eight fraudulent loan transactions – four mortgage loans, three home equity lines of credit and a car loan. The scheme had allegedly been operating since at least 2010.

The trio allegedly obtained the loans by setting up a complex web of phony identities in which practically every person or business involved in the loan was nonexistent, according to the AG’s office.

“They created all the hallmarks of a legitimate residential loan transaction by using stolen and fictitious identities to fill all of the required roles: seller, attorneys, settlement agent, title agent, homeowner’s insurance company, notary and other parties,” the AG’s office said in a release. “The loan applications contained many falsified documents, including closing documents, wire transfer documents and title insurance documents, all of which were purportedly witnessed, prepared or reviewed by parties or professionals who, in fact, either did not exist or had no knowledge of the transactions.”

The defendants created a convincing enough illusion of legitimacy that lenders processed the fraudulent applications, according to the AG. Once the loan was approved, the lender would disburse the proceeds – for the mortgage loans, those ranged from $196,000 to $230,000 – to a bank account under the name of a title company or law firm. Needless to say, these title companies or law firms either didn’t exist or had no
knowledge of the account opened in their names, the AG alleged.

“At that point, the defendants or other co-conspirators allegedly withdrew the loan proceeds by visiting ATMs and bank branches in New Jersey to make numerous and frequent withdrawals,” the AG’s office stated. “The withdrawals occurred over a period of time ranging from several weeks to several months until the entire amount stolen from the lender was withdrawn. Frequently, participants allegedly withdrew several thousand dollars from various ATMs or bank offices in a single day.”

“Mortgage loans are a tempting target for con artists because so much money is at stake and because lenders often conduct loan closings remotely, relying on electronic communications and paper,” said Director Elie Honig of New Jersey’s Division of Criminal Justice. “I commend the state and federal investigators who handled this complex case and untangled the web of deception allegedly woven by the defendants.”

If convicted, the defendants could face decades in prison. First-degree money laundering carries a 10-20 year sentence and a fine of up to $500,000, while first-degree conspiracy carries a 10-20 year sentence and a fine of up to $250,000. Second-degree crimes carry sentences of 5-10 years and fines of up to $150,000.



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