Six men were indicted by a grand jury on 10 counts involving charges that they stole more than $2.6 million from lenders by filing fraudulent mortgage loan applications. Those charged in the indictment are:
Jonathan P. Domash, 40, Marlboro, New Jersey;
Diversified Assets, Inc., owned and operated by Domash;
Elliot N. Bauer, 50, Marlboro, New Jersey;
Mortgage Loan Solutions, owned and operated by Bauer;
Mark J. Bellotti, 55, Morganville, Ohio, an attorney;
Leonardo A. Hernandez, 40, Hillsborough, Ohio;
James E. Felton III, 46, East Orange, Ohio; and
Michael R. Figler, 30, Andover, Ohio.
All of the defendants are charged with conspiracy (2nd degree). Domash, Bauer, Bellotti and the two companies are each charged with seven counts of theft by deception (2nd degree) in connection with seven mortgage loans totaling $2,671,400 that were allegedly obtained by fraud. Hernandez is charged with two counts of theft by deception (2nd degree) related to two of the loans, and Felton and Figler are each charged with one count of theft by deception (2nd degree).
It is alleged that the defendants falsified information about employment, earnings and bank account balances on mortgage loan applications so that home buyers could obtain loans for which they were not qualified. They also allegedly falsified U.S. Department of Housing and Urban Development (HUD) settlement forms.
The indictment alleges that the defendants submitted fraudulent loan applications and HUD documents between April 2006 and June 2007 to obtain mortgage loans in the following amounts for seven homes in the following locations: Hillsborough ($540,000), Plainfield ($342,000), Marlboro ($339,150), Keansburg ($351,500), Asbury Park ($384,750), Asbury Park ($374,000), and Newark ($340,000).
Domash would find homeowners who were eager to sell, and then convince buyers to invest in the homes as income properties through his company. Domash allegedly had buyers sign blank loan applications, so he could falsify their personal financial information. Bellotti allegedly handled the closings for the home sales, performing separate closings with the buyers and sellers. All of the applications were processed through Bauer at Mortgage Loan Solutions.
The defendants allegedly inflated the sales prices for the properties and took out huge fees at closing from the loan proceeds. All of the homes ultimately fell into foreclosure, and some purchasers had their credit ruined.
In connection with the Newark property, Domash, Bauer, Bellotti, Figler and the two companies are charged with stealing the identity of a woman in order to use her name and identifying information to file the mortgage loan application and purchase the home. In addition to theft by deception, they are charged with second-degree identity theft and fourth-degree forgery in connection with that fraudulent transaction.
Second-degree crimes carry a maximum sentence of 10 years in state prison and a $150,000 fine, while fourth-degree crimes carry a maximum sentence of 18 months in state prison and a $10,000 fine. The indictment is merely an accusation and the defendants are presumed innocent until proven guilty.
The indictment was handed up to Superior Court Judge Linda R. Feinberg in Mercer County, who assigned the case to Monmouth County, where the defendants will be arraigned at a later date on the charges.
Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced the charges.
“We charge that these defendants stole more than $2.6 million from mortgage lenders by falsifying loan applications for unqualified home buyers,” said Attorney General Dow. “The defendants collected exorbitant fees from the loan proceeds, while the home buyers were left to face foreclosure and ruined credit.”
“We are dedicating additional personnel and resources to fighting mortgage fraud and other financial crimes,” said Director Taylor. “We will continue to crack down on dishonest brokers who view loan applications as blank checks that they can falsify to generate illicit profits.”
Deputy Attorney General Valerie A. Noto presented the case to the state grand jury. The investigation was conducted and coordinated for the Division of Criminal Justice Financial and Computer Crimes Bureau by Detective Kimberly Allen, Deputy Attorney General Noto, and Supervising Deputy Attorney General Terrence Hull, who is Bureau Chief.
Attorney General Dow and Director Taylor noted that the Division of Criminal Justice has established a toll-free tipline 1-866-TIPS-4CJ for the public to report corruption, financial fraud and other illegal activities. Additionally, the public can log on to the Division of Criminal Justice Web site at www.njdcj.org to report suspected wrongdoing. All information received through the Division of Criminal Justice tipline or Web page will remain confidential.
The indictment charging these defendants is as a result of an investigation by the Division of Criminal Justice Financial and Computer Crimes Bureau.