A lawyer in New Jersey has pleaded guilty to a charge of conspiracy to commit bank fraud, admitting to running a large-scale mortgage fraud scheme that caused losses of millions of dollars, the US Attorney’s Office for the District of New Jersey announced.
Christopher Goodson entered his plea before US District Judge Katharine Hayden in Newark federal court.
Authorities said that Goodson engaged in a short-sale mortgage scheme along with co-defendant Anthony Garvin and others. The scheme targeted various New Jersey properties with mortgages that were in default.
Properties targeted in the scheme were sold at a loss, then flipped at a much higher price. Goodson admitted that the conspirators rigged the process at each step to maximize the difference in price between the two transactions and keep the victim financial institutions from detecting the fraud. The conspiracy defrauded financial institutions out of millions of dollars.
In the first transaction, the conspirators would convince the financial institution holding the mortgage to accept the sale of a target property at a loss. In the second transaction, the conspirators would flip the same target property from the first buyer to a second buyer, who would typically obtain a mortgage from another financial institution using false loan applications. As a result, the second transaction frequently closed for significantly more or even double the price of the first transaction.
The conspiracy to commit bank fraud count is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Goodson is scheduled to be sentenced in January.
Garvin, a real estate agent and investor, faces allegations that he coordinated fraudulent transactions as part of the scheme. The charge against him remains pending.