Monday, August 27, 2007
Appraiser Pleads Guilty in $50 Million Real Estate Investor Fraud
William Page, 37, Old Bridge, New Jersey, pled guilty before U.S. District Judge Jose L. Linares to a one-count Information charging him with conspiracy to commit mail fraud for creating materially false and misleading property appraisals and construction progress letters. The scheme involved the following defendants:
John Morris, 61, Fort Lee, New Jersey;
Michael Meehan, 47, Belmar, New Jersey;
John Kurzel, 55, New Brunswick, New Jersey;
Lucesita Santiago, 37, Woodbridge, New Jerswey.
Katrina Arrington, 34, Hillside, New Jersey;
The inflated appraisals were used to assure individuals that their investments in NJ Affordable Homes Corp., (NJAH) were secured by investment properties. The false construction progress letters falsely stated that renovations and improvements were made to investment properties and were used to fraudulently disburse investors’ funds from escrow.
Morris pled guilty before Judge Linares to a one-count Information charging him with conspiracy to commit wire fraud in connection with his role in a conspiracy to defraud mortgage lenders of at least $2 million. Morris oversaw the creation of fraudulent property appraisals that were sold by NJAH to nominee or straw buyers. Using the fraudulent appraisals, NJAH prepared fraudulent loan applications in the names of nominee buyers and sold the properties at inflated prices. The scheme left mortgage lenders with loans that were grossly undersecured, and nominee buyers with outstanding mortgage loans in their names.
Page and Morris are the fifth and sixth individuals associated with NJAH who have pleaded guilty in related investment and mortgage fraud schemes. NJAH, Perth Amboy, New Jersey, purported to be in the real estate financing and investment business. The company first came under scrutiny of the Securities and Exchange Commission, which obtained a restraining order against the company in September 2005. NJAH subsequently was ordered into receivership and then bankruptcy by a federal judge.
In March 2007, Meehan pled guilty to his role in the conspiracy to defraud various lending institutions. In January 2007, co-conspirator Arrington pled guilty to her role in the conspiracy. In October 2006 co-conspirators Kurzel and Santiago both pled guilty to the same conspiracy charge for their participation in the mortgage fraud scheme.
Christie said the investigation is continuing as to the company and other individuals believed to be involved.
At his plea hearing, Page admitted that during the period 1998 through September 2005, he knowingly created materially false and misleading property appraisals that fraudulently inflated the value of properties that NJAH used to purportedly secure investor funds. The appraisals were used by NJAH to persuade individuals to make and retain over $100 million of investments made with the company. Page also admitted that he created materially false and misleading construction progress letters that were used to release investors’ money from an attorney escrow account.
At his plea hearing, Morris admitted that from about March 2003 through September 2005, as NJAH‘s appraisal coordinator, he participated in a conspiracy to defraud various mortgage lenders by submitting materially false and misleading property appraisals and altered photos of properties. The appraisals materially overstated the value of the properties and stated falsely that the properties had substantial improvements such as new windows, new bathrooms, new electric wiring, new plumbing and new siding.
Judge Linares scheduled sentencing for Page and Morris for December 10, 2007. Both Page and Morris are free on $25,000 unsecured bonds. The charges to which Page and Morris pleaded guilty carry a statutory maximum penalty of five years in federal prison and a fine of $250,000.
The guilty pleas of Page, Morris, Meehan, Arrington, Santiago and Kurzel stem from a criminal referral made by the U.S. Securities and Exchange Commission’s Enforcement Division and result from a combined investigation conducted by the Federal Bureau of Investigation, the U.S. Department of Housing and Urban Development and the U.S. Postal Inspection Service.
mortgage fraud
Did the investors in NJAH get their money back
Posted by on 06/29 at 08:18 AM
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
