Christopher Goodson, 44, Newark, New Jersey, a New Jersey attorney and Anthony Garvin, 47, Jersey City, New Jersey, are charged by complaint with one count of conspiracy to commit bank fraud. They were charged with running a large-scale mortgage fraud scheme that involved dozens of properties in Jersey City, Clifton, Union, and elsewhere in New Jersey and caused losses of more than $30 million.
According to the Complaint:
From January 2011 through August 2017, Goodson, Garvin, and others engaged in a short sale mortgage fraud conspiracy targeting various New Jersey properties with mortgages that were in default.
As part of the scheme, the conspirators arranged simultaneous fraudulent transactions on the same target property. In the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to accept the sale of the target property at a loss, usually to a buyer who was secretly a conspirator or an entity controlled by the conspiracy.
In the second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using false loan applications, pay stubs, bank account statements and title reports provided by members of the conspiracy. As a result, the second transaction frequently closed for significantly more or even double the price of the first transaction.
Goodson, Garvin, and others allegedly rigged the short sale process at each step in order to maximize the difference in price between the two transactions and keep the victim financial institutions from detecting the fraud.
For instance, Goodson, an attorney, concealed the fact that he played multiple-roles in the short sale transactions, including allegedly generating false preapproval letters from a New Jersey corporation he owned that purported to be a short-term lending company operating out of California. These letters were used to deceive banks into believing that the purchaser – typically a conspirator or entity controlled by Goodson – had the credit necessary for the transaction. Goodson also negotiated the fraudulent short sales with the banks, generated phony deeds that backdated the closing date of the first transactions, and even served as the closing attorney during some of the short sales.
Garvin was a real estate agent and investor who allegedly coordinated fraudulent transactions as part of the scheme.
The conspirators disbursed the funds into various accounts they controlled to conceal their illegal activities and split the profits. In total, the conspiracy defrauded financial institutions out of more than approximately $30 million.
The conspiracy to commit bank fraud count is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine.
Both defendants were arrested this morning and are expected to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.
Acting U.S. Attorney Fitzpatrick made the announcement and credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin, and special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, with the investigation
The government is represented by Assistant U.S. Attorneys David Feder and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.