Nine of ten individuals from New Jersey were arrested by special agents of the FBI and IRS”“Criminal Investigation in connection with their alleged roles in a $40 million mortgage fraud scam that used phony documents and straw buyers to make illegal profits on overbuilt condos at the Jersey Shore and resort destinations in South Carolina and Georgia, N.J.
Charged by Indictment were:
Joseph Witkowski, 66, Flemington, N.J.; Robert Serao, 46, Bayville, N.J.; Catherine Pearson, 53, West Orange, N.J.; Isatu Tejan-Sie, 54, Long Branch, N.J.; Crystal Brame (not in custody), 42, Irvington, N.J.; Karen Yokely, 59, Plainfield, N.J.; George Lachenmayr Jr., 79, Irvington, N.J.; Aku I. Muhammad, 42, Newark; Mark Kreischer, 33, Elmwood Park, N.J.; and Marc Jacobs, 47, Hackettstown, N.J.
The nine defendants are expected to appear before U.S. Magistrate Judge Joel Schneider in Camden federal court. All 10 defendants are charged by Indictment with conspiracy to commit wire fraud. Additionally, Witkowski is charged with conspiracy to commit money laundering.
According to the Indictment:
Witkowski and the conspirators located for purchase oceanfront condominiums overbuilt by financially distressed developers, properties in resort destinations in South Carolina and Georgia, and other properties in New Jersey. Witkowski, Pearson, Tejan-Sie, and Brame recruited straw buyers, including Lachenmayr, Muhammad, Kreischer, and Jacobs, to purchase those properties. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators, including Pearson, created false documents such as fake W-2 forms, income tax returns, and investment statements to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
To prepare the straw buyers’ false loan applications, Witkowski and his conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers ““ including Serao ““ that the brokers knew were false, attributing to the straw buyers inflated income and assets. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Witkowski and his conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.
Many of the conspirators not charged in the Indictment have already pleaded guilty to the mortgage fraud scheme. Charles Harvath, 33, Lodi, N.J., Stephen F. Corba, Jr., 36, Farmingdale, N.J., and William Brown, 60, Newark, N.J., pleaded guilty on July 19 and August 3, 2011, and April 5, 2012, respectively, to Informations charging them each with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Harvath, Corba, and others located distressed properties, recruited straw buyers, and created false documents in order to inflate the straw buyers’ qualifications as part of the scheme. Sentencing for Brown is currently scheduled for Sept. 6, 2012; sentencing for Harvath and Corba will be scheduled by the Court.
John Siuszko, 56, Wharton, N.J., and Michael Williams, 34, Jersey City, N.J., also pleaded guilty on July 27, 2011, and August 16, 2011, respectively, to Informations charging them with conspiracy to commit wire fraud. Siuszko and Williams served as straw buyers, causing lender to release almost $980,000 and $632,000, respectively, based on fraudulent mortgage loan applications. Siuszko was sentenced on June 25, 2012, to 18 months in prison, to be followed by two years supervised release, ordered to forfeit $40,000 and ordered pay a $5,000 fine. Sentencing for Williams will be scheduled by the Court.
The wire fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Paul J. Fishman announced the charges.
U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Michael B. Ward in Newark; special agents from the FBI’s Hilton Head Resident Agency, under the direction of Special Agent in Charge David A. Thomas in Columbia, S.C.; and special agents from IRS ““ Criminal Investigation in Mays Landing, under the direction of Acting Special Agent in Charge John R. Tafur, for the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Diana V. Carrig and Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
