Michael Rumore, 55, and Kenneth Jones, 64, both pleaded guilty to conspiracy to commit bank fraud. The two men participated in a scam that cost mortgage lending companies more than $30 million over the course of four years, according to U.S. Attorney Paul J. Fishman.
Prosecutors say that from 2006 to 2010, Jones and Rumore, along with several other conspirators, scammed lenders through a company called Premier Mortgage Services (PMS). Targeting properties in low-income areas of New Jersey, the scammers recruited straw buyers and created fraudulent documentation to make the buyers seem to have far more assets than they actually did.
The scammers used the phony documentation to obtain mortgages from lenders, then split the take at the closings. According to prosecutors, the closings themselves went forward through the use of fake settlement statements which hid the actual sources and destinations of the mortgage funds.
When the straw buyers – who had no means of paying the mortgages down – defaulted, many of the properties went into foreclosure. All told, lending companies taken in by the scam lost more than $30 million.
Rumore, an attorney, participated in the scam by serving as a settlement agent on the phony loans, convening closings, receiving funds from lenders and preparing falsified documentation. Jones, a tax preparer, created fraudulent income verifications for the straw buyers in the scheme.
Each could face up to 30 years in prison and fines of up to $1 million. They are scheduled for sentencing in March.
Two New Jersey residents pleaded guilty Monday to their roles in a years-long, multimillion-dollar mortgage fraud scheme, according to the District of New Jersey U.S. Attorney’s Office.