Ronald Harris Jr., 42, Piscataway, New Jersey, formerly of West Orange, New Jersey, who owned and operated multiple foreclosure rescue companies was sentenced for his role in a mortgage fraud scheme that defrauded numerous mortgage lenders of more than $10 million.
As previously reported on Mortgage Fraud Blog, Harris previously pleaded guilty to an Information charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. A former employee of Harris’ ““ Sterling Bruce, 38, Newark, New Jersey ““ was also sentenced to 18 months in prison. Bruce previously pleaded guilty to one count of wire fraud conspiracy.
According to documents filed in this case and statements made in court:
Harris owned and operated Harris Capital and Skyline Capital Group, both of which held themselves out as foreclosure rescue companies and operated out of offices in Newark and Maplewood, New Jersey. Harris admitted he and other individuals, including Harris Capital employee Bruce, fraudulently promised to help homeowners avoid foreclosure, keep their homes, and repair their damaged credit. They directed the homeowners to allow the title to their homes to be put in the names of third party purchasers, or straw buyers, for six months to a year. Harris told the homeowners that during that time period, he and others would help them obtain more favorable mortgages and improve their credit ratings. The homeowners were told the titles to their homes would be returned to them.
After the homeowners were signed up, Harris, Bruce and others recruited individuals with good credit scores to act as straw buyers of the distressed properties. The straw buyers were told that they were helping someone save his or her home and that they would make money when they sold the property back to the current owner.
Once the distressed homeowners and straw buyers were in place, Harris, Bruce and Pia Perkinson, 40, Parlin, New Jersey ““ a mortgage loan officer at a number of different mortgage loan companies ““ and others caused loan applications to be sent in the straw buyers’ names to mortgage lenders. To increase the credit-worthiness of the straw buyers and to ensure that they would be approved for the loans, Harris, Bruce, Perkinson, and others submitted loan applications containing false personal material and financial information about the straw buyers, such as misstating their employment, income, and assets. Many of the straw buyers’ loan applications falsely stated that they worked for one of Harris’ companies making a substantial salary. Harris would also regularly submit fraudulent supporting documents with the loan applications to support the false statements, such as fake employment records and fake investment account statements.
Prior to the closings of these fraudulent transactions, Harris and Bruce regularly filed fraudulent liens for tens of thousands of dollars on the properties. At the closings of the transactions, the liens would be paid off with the proceeds of the fraudulently obtained loans. Harris admitted that he regularly laundered these loan proceeds through various bank accounts he controlled. Harris and his co-conspirators caused lenders to fund dozens of fraudulent loans that totaled more than $10 million, with Harris receiving approximately $1,145,993 of that amount.
U.S. District Judge Faith S. Hochberg imposed the sentences in Newark federal court. In addition to the prison term, Judge Hochberg sentenced Harris to five years supervised release, a $12,500 fine, a forfeiture judgment of $945,548 and restitution of $1.8 million. In addition to his prison term, Bruce was sentenced to three years supervised release and ordered to pay restitution of $1.3 million. Both men were banned from working in the financial, mortgage, lending and real estate industries during the period of supervised release.
Perkinson previously pleaded guilty to one count of wire fraud conspiracy and admitted submitting fraudulent loan applications to various lenders, as well as taking out at least two fraudulent loans herself. She is currently scheduled to be sentenced on June 18, 2012.
Another co-defendant, Sabir Muhammad, 48, South Plainfield, New Jersey, previously pleaded guilty to two counts of wire fraud and is scheduled to be sentenced on September 4, 2012.
U.S. Attorney Paul J. Fishman made the announcement.
U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Philip R. Bartlett; special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward; and special agents of IRS ““ Criminal Investigation, under the direction of Acting Special Agent in Charge John R. Tafur, with the investigation leading to the sentence.
The government is represented by Assistant U.S. Attorneys Aaron Mendelsohn and Matthew E. Beck of the U.S. Attorney’s Office Criminal Divison in Newark.