Three NJ men face up to 30 years in prison over mortgage fraud charges

by Francis Monfort08 Oct 2018

Three New Jersey men were arraigned on multiple charges in connection with their alleged roles in a mortgage fraud scheme that fraudulently obtained mortgage loans with a total value of more than $4 million, according to the US Attorney’s Office for the District of New Jersey.

Victor Santos, a real estate investor; Arsenio Santos, a builder; and Fausto Simoes, a real estate settlement attorney, were charged on September 24 in a 19-count indictment. Each was charged with one count of conspiring to commit bank fraud and separately charged with various counts of bank fraud and making false statements in an application for credit.

The conspiracy to commit bank fraud count, the bank fraud counts, and the false statement counts each carry a maximum potential penalty of 30 years in prison and a fine of $1 million or twice the gross gain to the defendants or twice the gross loss to others, whichever is greater.

From September 2007 through November 2008, Victor Santos, Arsenio Santos, and others are alleged to have recruited straw buyers to purchase properties in Newark. In exchange for the buyers’ identity and credit history, the schemers agreed to pay each of them at least $5,000, provide the down payment and cash required for closing, and make the mortgage payments. Shortly after the properties were acquired, the mortgages went into default.

The conspirators allegedly arranged the transactions so that the straw buyers would nominally purchase the properties for far more than the sellers had agreed to sell them. The conspirators then diverted the excess loan proceeds for their own benefit and to further the conspiracy.

Simoes acted as the closing attorney on approximately 10 of the transactions. He signed and certified the final settlement statements that falsely stated that the cash required for closing for each transaction came from the straw buyer.