Joseph A. Gonzalez, 46, Henderson, Nevada, pleaded guilty today for his role in a scheme to use bogus information and simultaneous loan applications at multiple banks – known as “shot-gunning” – to attempt to obtain home equity lines of credit (HELOCs).
According to documents filed in the case and statements made in court:
From 2010 through 2018, Jorge Flores and Simon Curanaj, a real estate broker in the Bronx, New York who has previously pleaded guilty and is awaiting sentencing, ran a mortgage fraud scheme in which they applied for more than $9 million in HELOCs from banks on residential properties in New Jersey and New York.
Gonzalez and Flores used a property in Jersey City, New Jersey, as part of the scheme. Gonzalez had been allowed by the owner of the property to live there in exchange for management services, but neither he nor Flores owned the property. Gonzalez also recruited an individual with good credit to act as a straw buyer (Individual 1). Unbeknownst to the owner of the property, a “quitclaim” deed – which contains no warranties of title – was prepared transferring the property to Individual 1. The signatures on the deed were forged.
Gonzalez and Flores then applied for two HELOCs from multiple banks using the Jersey City, New Jersey property as collateral in Individual 1’s name. They concealed the fact that the property offered as collateral was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also contained false information concerning Individual 1’s income, which was stated to be higher than his actual income. At the time the applications were made, the value of the property was less than the amount of the HELOC loans for which Gonzalez and Flores applied.
The victim banks eventually issued loans to Individual 1 in excess of $500,000. After the victim banks funded the HELOCs and deposited money into Individual 1’s bank account, Individual 1 disbursed almost all of it to Gonzalez, Flores, and others. Gonzalez used $43,000 of the illicit proceeds to buy a luxury car. Individual 1 eventually defaulted on both HELOC loans.
The conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross pecuniary gain to the defendants or twice the gross pecuniary loss to others, whichever is greater. Sentencing is scheduled for February, 10, 2021.
Gonzalez is the sixth person to plead guilty as part of the scheme.
U.S. Attorney Craig Carpenito made the announcement.
U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the guilty plea.
The government is represented by Senior Trial Counsel Jason S. Gould of the U.S. Attorney’s Health Care Fraud Unit in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.