Paul Watterson, 55, Mountainside, New Jersey, was sentenced to 15 months in prison for his role in a multi-million dollar mortgage fraud scheme that used phony documents and straw buyers to make illegal profits on over-developed condominiums in the Wildwood, New Jersey, area. Watterson previously pleaded guilty to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.
According to documents filed in this case and statements made in court:
Watterson, who was a property manager, and his conspirators identified homes in Wildwood, New Jersey, and Wildwood Crest, New Jersey, and recruited straw buyers to purchase those properties at the inflated rates. The straw buyers had good credit scores, but lacked the financial resources to qualify for mortgage loans. Watterson created fraudulent loan applications that contained false information about the straw buyers’ employment, income, assets and intended use of the properties. Watterson also obtained on behalf of his conspirators false documents to support the phony loan applications for certain straw purchasers. Watterson’s actions were designed to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Watterson 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 that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Watterson’s 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. Watterson received $273,600 from five separate real estate transactions.
U.S. Attorney Paul J. Fishman made the announcement and credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to the sentencing.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden, New Jersey.