Paul DiGiacomo, 46, Madison, New Jersey, a lawyer, was sentenced to prison for his role in a scheme to defraud a mortgage lender of $431,200 by filing a false loan application and purchasing a home in Newark, New Jersey in the name of a man who was deceased.
The leader of the scheme, Genilza R. Nunes, 38, Kearny, New Jersey, (aka Leticia Wilchez, Geny Silva, Gena Nunez and Genilza Borges), pleaded guilty on May 8 to second-degree money laundering. She is scheduled to be sentenced on October 12, 2012. The state will recommend that she be sentenced to 10 years in state prison, including two years of parole ineligibility, and be ordered to pay a $150,000 fine.
DiGiacomo was sentenced to seven years in state prison by Superior Court Judge Thomas V. Manahan in Morris County, New Jersey. He was ordered to pay $42,404 in restitution and a fine of $150,000 for money laundering. DiGiacomo pleaded guilty on May 21, 2012 to second-degree money laundering. He admitted that he laundered the stolen loan proceeds through his attorney trust account. Deputy Attorney General Marysol Rosero prosecuted the case and handled the sentencing for the Division of Criminal Justice Financial & Computer Crimes Bureau.
Three other defendants pleaded guilty earlier this year:
Lillian Veras, 41, Kearny, New Jersey (aka Lillian Urena) pleaded guilty on May 14, 2012 before Judge Manahan to second-degree money laundering. Veras, a real estate agent and notary, helped prepare false loan documents for the scheme and forged signatures. She faces a recommended sentence of seven years in prison and a $150,000 fine.
Maureen R. Stillwell, 51, Somerville, New Jersey, an employee of Ideal Title Agency, LLC, who helped prepare false closing documents, pleaded guilty before Judge Salem Vincent Ahto on May 8, 2012 to second-degree money laundering. She faces a sentence of up to seven years in prison and a $25,000 fine.
Sheila Zullo, 46, Green Brook, New Jersey, the owner of Ideal Title Agency, LLC, pleaded guilty on May 7, 2012 before Judge Manahan to third-degree money laundering. She admitted that she illegally distributed the loan funds as escrow agent. She faces a recommended sentence of up to three years in prison and a $150,000 fine.
Those three defendants are scheduled to be sentenced on October 12, 2012 along with Nunes.
A sixth defendant, Nuno J. Sousa, 37, Union City, New Jersey agreed to be charged by accusation with third-degree securities fraud and was admitted by the court into the Pre-Trial Intervention Program in April. All six defendants who have pleaded guilty or entered PTI are required to pay restitution to the lender, Provident Funding Associates.
Nunes, the mastermind of the scheme, acted as a principal of Leska Management, a bogus real estate management company. With Veras’ assistance, she arranged for the purchase of a home in Newark, New Jersey from a woman who had fallen behind in her mortgage payments. The seller owed $477,196 on her loan, but the holder of the mortgage, Kondaur Capital Corp., agreed to a “short sale” for $260,000 to a purported buyer identified by the defendants. A “short sale” is a pre-foreclosure sale where the mortgage holder agrees to permit the home to be sold for less than the amount due on the loan.
That sale was never completed. DiGiacomo, who held himself out as the attorney for both the buyer and Leska, told Kondaur the sale had fallen through. He then negotiated with Kondaur to assign the mortgage to Leska at a discounted price of $219,877. He never disclosed that, prior to assignment of the mortgage, the home was sold at an inflated price of $539,000 to a fictitious buyer created by the defendants. Nunes, with assistance from Sousa, a mortgage broker, fraudulently applied to Provident Funding Associates for a $431,200 mortgage loan and purchased the home using the identity of a deceased man whose last name was “Benazi.” Nunes created counterfeit bank records, employment records and false identification documents for Benazi for the loan application, and she had another man pose as Benazi at the closing. No payments were ever made to the lender on the loan. The seller was never notified of the closing, and her signature was forged on the closing documents.
Stillwell handled the closing for Ideal Title and assisted in the creation of false closing documents used to deceive the lender. She never collected monies due at closing from the buyer, and falsified HUD settlement statements to indicate that they had been collected and that the prior mortgage had been paid off. In her role as escrow agent, Zullo, the owner of Ideal Title, misappropriated loan proceeds by wiring $376,032 to DiGiacomo’s attorney trust account at Nunes’ direction. DiGiacomo used $219,877 of the misappropriated funds to pay for the assignment of the mortgage and wired the balance of $156,155, representing the net illegal profits, into a bank account controlled by Nunes and Veras. Stillwell, Zullo and DiGiacomo were all compensated for their participation in the scheme.
Attorney General Jeffrey S. Chiesa made the announcement.
“Lawyers take an oath to uphold the law and are expected to be honest stewards of the money entrusted to them as attorneys,” said Attorney General Chiesa. “When dishonest lawyers like this one take advantage of the trust placed in them, the potential for harm and loss is great. We will not tolerate lawyers who abuse their licenses and break the law.“
“Home sales and mortgage loans are the biggest financial transactions most people undertake in their lifetimes, and the cost of mortgage fraud is proportionately high,” said Stephen J. Taylor, Director of the Division of Criminal Justice. “We’re working hard to protect lenders and all parties to these transactions by aggressively prosecuting mortgage fraud.”
Detective Sgt. Louis A. Matirko and Deputy Attorney General Rosero conducted the investigation and were assisted by Deputy Attorney General Michael Rappa, Special Agent Tanya Chavez, Office of Inspector General, U.S. Department of Housing and Urban Development, Special Agent Robert Manchak, Office of Inspector General, Federal Housing Finance Agency, and Division of Criminal Justice Interns Andrew Davenport, Brittany Kieran and Cara Ogulin.