Ex-loan officer gets 18 months for role in mortgage fraud scheme

by Francis Monfort24 May 2018

A former loan officer for a New Jersey mortgage lender has been sentenced to prison after admitting his role in a mortgage fraud scheme that exposed lenders and the Federal Housing Administration to more than $2 million in potential losses, the US Attorney’s Office for the District of New Jersey announced.

District Judge Susan Wigenton sentenced Joseph DiValli to 18 months in prison and to three years of supervised release. DiValli was also ordered to pay restitution of approximately $2.3 million. He previously pleaded guilty before to charges of conspiracy to commit wire fraud, wire fraud, and tax evasion.

Court proceedings established that DiValli conspired with others to fraudulently obtain mortgage loans for properties in North Jersey. In the scheme, which ran from March 2011 through November 2012, the conspirators recruited straw buyers and submitted fraudulent loan applications so the straw buyers could qualify for the loans.

DiValli and the others submitted false appraisal reports, backdated deeds, and used unlicensed title agents to close transactions and disburse the mortgage proceeds. Another conspirator, who worked at a bank, created misleading certifications showing certain bank accounts held more money than they actually had.

As a loan officer for a North Jersey mortgage lender, DiValli facilitated some of these fraudulent transactions, including a $244,855.26 mortgage on a property located in Elizabeth, N.J. Overall, the scheme induced lenders to issue more than $6 million in loans, resulting in several defaults and exposing lenders and the Federal Housing Administration (FHA) to more than $2 million in potential losses.

In addition to admitting his role in the conspiracy, DiValli also admitted to fraudulently modifying the mortgage on his personal residence. From March 2011 through June 2012, he used false payroll ledgers and earnings statements to deceive a loan officer into believing that his net earnings were lower than his actual income level. DiValli also admitted failing to file taxes for 2012 and cashing paychecks at a check-cashing facility to conceal his 2012 income of more than $450,000 to avoid taxes of $79,000.

 

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