Archives For New Jersey

Attorney & Settlement Agent Admits Role in Reverse Mortgage Fraud Scheme

Stephanie Abbott —  December 17, 2021 — Leave a comment

Martin D. Eagan, 50, Montville, New Jersey, today admitted his role in a reverse mortgage fraud scheme that exploited several elderly homeowners.

According to documents filed in this case and statements made in court:

Eagan, principal of the Martin D. Eagan Law Firm, was an attorney licensed by the state of New Jersey with a practice in Morristown, New Jersey, that primarily focused on real estate transactions, such as loan originations, reverse mortgages and the refinancing of residential homes.

From 2007 through 2010, Eagan, acting as a settlement agent, was required to comply with instructions established by financial institutions that provided loan funds to borrowers. As part of the lending process, Eagan was required to generate and certify HUD-1 settlement statements that Eagan submitted to lenders. The HUD-1 settlement statement itemized the receipt and disbursement of all funds for each real estate closing. HUD-1 settlement statements were required to be approved by a lender before a settlement agent could disburse funds. The disbursement of funds had to mirror the representations made on the lender-approved HUD-1.

Eagan and his conspirators submitted fraudulent documentation to lenders to persuade lenders to approve and fund reverse mortgages and the refinancing of existing mortgages. Fraudulent documentation submitted included false HUD-1s that concealed from the lenders the fact that disbursements of loan proceeds went to conspirators, or entities the conspirators owned or controlled, and false appraisals that overstated the value of homes.

Eagan, his conspirators, and others controlled the loan application process from the time the homeowners applied for loans to the disbursement of loan funds, and ultimately through the diversion of loan proceeds to conspirators.

Eagan pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of conspiracy to commit bank fraud.

The conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for April 14, 2022.

U.S. Attorney Philip R. Sellinger made the announcement.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s guilty plea.

The government is represented by Special Assistant U.S. Attorneys Kevin Di Gregory and Charlie L. Divine of the Federal Housing Finance Agency, Office of Inspector General.

 

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Loan Officer Admits Participation in Large-Scale Mortgage Fraud Scheme

Stephanie Abbott —  December 13, 2021 — Leave a comment

Isaac DePaula, 41, a loan officer for a mortgage company today admitted his role in a long-running, large-scale mortgage fraud scheme,

According to the documents filed in this and other cases and statements made in court:

From September 2006 to September 2010, DePaula and his conspirators engaged in a long-running, large-scale mortgage fraud conspiracy through a mortgage company called Premier Mortgage Services (PMS). The conspirators targeted properties in low-income areas of New Jersey. After recruiting straw buyers, the defendants used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets, and earned far more income, than they actually did. The defendants then submitted these fraudulent documents as part of mortgage loan applications to financial institutions. Relying on these fraudulent documents, financial institutions provided mortgage loans for the subject properties.

The defendants then split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (HUD-1s), which hid the true sources and destinations of the mortgage funds provided by financial institutions. The defendants made false representations and provided fraudulent documents when, in fact, the straw buyers had no means of paying the mortgages on the subject properties, many of which entered into foreclosure proceedings.

The defendants played different roles in the scheme, and others charged and convicted included a part owner of PMS, an attorney who aided the fraud by performing closings on many of the subject properties, an accountant who created false documents, the owner of a real estate development company, several loan officers, and a paralegal for another attorney who also closed fraudulent transactions.

DePaula was a loan officer at PMS and recruited straw buyers, provided false and fraudulent documents to the straw buyers, and incorporated false and fraudulent documents into loan applications to induce financial institutions to fund mortgage loans. The loan officers profited illegally by receiving a commission from PMS for each mortgage loan that they closed, and also profited illegally by diverting portions of the fraudulently obtained mortgage proceeds for themselves, often via shell corporations or nominee bank accounts.

DePaula was a long-time fugitive who was charged by criminal complaint in 2012 and by indictment in 2016. He returned to the United States in March 2020 to face the charges in the indictment.

Acting U.S. Attorney Rachael A. Honig made the announcement.

The offense to which DePaula pleaded guilty carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is scheduled for April 19, 2022.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and special agents of the Federal Housing Finance Agency – Office of the Inspector General, under the direction of Special Agent in Charge Robert W. Manchak, with the investigation leading to today’s guilty plea.

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Duo Individuals Sentenced for Roles in Mortgage-Fraud Scheme

Stephanie Abbott —  November 16, 2021 — Leave a comment

Shonda Coleman, 49, Toms River, New Jersey, and Robert Goodrich, 62, Sayreville, New Jersey were sentenced today for their roles in a mortgage-fraud scheme.

According to documents filed in the case and statements made in court:

From 2009 to 2011 Coleman worked at Westinghouse Redevelopment Act Inc., a New Jersey business entity. In November 2009, Coleman submitted a fraudulent mortgage loan application to the lender to finance her own purchase of a home from Westinghouse. That application falsely represented, among other things, that Coleman owned $165,000 in cash, a representation intended to make Coleman appear more creditworthy than she actually was. In March 2011, Coleman again participated in the mortgage fraud scheme by helping to prepare and submit a mortgage application for a prospective buyer of a Westinghouse real estate property that she knew contained false information regarding the buyer’s finances.

Goodrich appeared at the closings for both the November 2009 and March 2011 transactions and signed settlement statements that he knew contained false information regarding the buyers’ creditworthiness.

Coleman previously pleaded guilty before Judge Wigenton to two counts of an indictment charging her and, with bank fraud. Goodrich had previously pleaded guilty before Judge Wigenton to the same two counts of the indictment to which Coleman pleaded guilty and was sentenced on April 7, 2021, sentenced to 27 months in prison. Judge Wigenton imposed Coleman’s sentence today by videoconference.

Acting U.S. Attorney Rachael A. Honig made the announcement.

Acting U.S. Attorney Honig credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, and the U.S. Department of Housing & Urban Development, Office of Inspector General, Mid-Atlantic Region, under the direction of Special Agent in Charge Shawn Rice, with the investigation leading to the sentencing.

The government is represented by Assistant U.S. Attorney Andrew M. Trombly of the Cybercrime Unit and Special Assistant U.S. Attorneys Kevin V. Di Gregory and Charlie L. Divine of the Federal Housing Finance Agency, Office of Inspector General.

 

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Man Sentenced to Prison for Role in Mortgage Fraud Scheme

Stephanie Abbott —  September 10, 2021 — Leave a comment

Dennys Tapia, 55, Ridgefield Park, New Jersey was sentenced today to 15 months in prison for his role in a scheme to defraud financial institutions of hundreds of thousands of dollars.

According to documents filed in this case and statements made in court:

From 2015 to 2018, Tapia conspired with others to fraudulently obtain mortgage loans from financial institutions, including “Mortgage Lender A” and “Mortgage Lender B,” to finance the purchase of properties by unqualified buyers. Applicants for mortgage loans are required to list their assets and income on their mortgage loan applications, and mortgage lenders rely on those applications when deciding whether to issue mortgage loans.

Tapia admitted participating in a conspiracy in which he knowingly provided fraudulent documents to a loan officer at Mortgage Lender A for potential borrowers, including fraudulent lease agreements, bank statements, and a gift check and gift letter. Based on this false information, Mortgage Lender A issued mortgage loans to unqualified buyers, which caused Mortgage Lender A hundreds of thousands of dollars in losses. Some of the loans Mortgage Lender A issued to unqualified borrowers were sold to the Federal Home Loan Mortgage Corporation “Freddie Mac,” a government-sponsored enterprise with the mission of providing liquidity, stability, and affordability in the United States housing market.

Tapia also admitted causing a straw borrower, “Individual A,” to apply to Mortgage Lender B for a cash-out refinance mortgage loan that contained multiple misrepresentations of material facts and fraudulent documents, including pay stubs and a verification of employment. Based on the false information submitted by Individual A and Tapia, Mortgage Lender B issued a false and fraudulent cash-out refinance mortgage loan, which resulted in Tapia earnings tens of thousands of dollars in profits.

Tapia previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of conspiracy to commit bank fraud. Judge Chesler imposed the sentence today in Newark federal court.

Acting U.S. Attorney Rachael A. Honig made the announcement.

In addition to the prison term, Judge Chesler sentenced Tapia to two years of supervised release and ordered restitution of $182,508 and forfeiture of $176,532.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jonathan Fayer of the Economic Crimes Unit of the U.S. Attorney’s Office, and Special Assistant U.S. Attorney Charlie Divine of the Federal Housing Finance Agency, Office of Inspector General.

 

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Former Sheriff’s Officer Charged in Connection with Fraudulent Short Sale

Stephanie Abbott —  July 21, 2021 — Leave a comment

Osbado Hernandez, 52, Avenel, New Jersey, a former Hudson County Sheriff’s officer, was charged for making false statements to a bank in connection with an application to discharge a mortgage through a fraudulent short sale.

According to documents filed in this case and statements made in court:

From September 2015 to Dec. 30, 2015, in order to induce a bank to discharge a mortgage on a property in Keansburg, New Jersey, Hernandez made false statements in connection with a fraudulent short sale of the property, including that he did not have any money to apply toward his mortgage delinquency and that he intended to vacate the property following the short sale. Hernandez fraudulently withheld information regarding the availability of funds in a savings account he failed to disclose to the bank. Hernandez also signed a sworn affidavit that he would not stay in the property for more than 90 days following the short sale, even though he intended to, and did, continue living at the property. As a result of the fraudulent short sale, the bank discharged over $98,000 of debt against Hernandez.

The false statements charge is punishable by a maximum potential penalty of 30 years in prison and a maximum fine of up to $1 million.

Hernandez appeared this afternoon via videoconference before U.S. Magistrate Judge Jessica S. Allen in Newark federal court and was released on $100,000 unsecured bond.

Acting U.S. Attorney Rachael A. Honig made the announcement.

Acting U.S. Attorney Honig credited special agents with the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney, and special agents with IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to the charge.

The government is represented by Assistant U.S. Attorney Elaine K. Lou of the Special Prosecutions Division in Newark.

The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

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Man Sentenced to Prison for Short Sale Fraud Scheme

Stephanie Abbott —  June 3, 2021 — Leave a comment

Steve Young Kang, aka “Steven Young Kang” and “Young Tae Kang,” 66, Ridgefield, New Jersey, was sentenced today to 18 months in prison for his role in a multi-year scheme to defraud financial institutions and others for a Short Sale Fraud Scheme.

According to documents filed in this case and statements made in court:

Kang and others fraudulently induced mortgage lenders to participate in “short sale” transactions, in which, typically, a financial institution agrees to allow a homeowner in financial distress to sell his or her home for less than the homeowner owes on the mortgage. Such transactions are called short sales because the market value of the house is less than the amount owed by the homeowner and the lender agrees to accept a payment “short” of the amount owed by the owner.

From June 2013 to January 2017, Kang, who owned and controlled two real estate brokerages, sold his own properties and recruited others to sell properties in fraudulent short sales to a co-schemer, Mehdi Kassai. The co-schemers convinced financial institutions to agree to short sales and to accept less than the properties were worth through false documents, straw buyers, and cosmetic damage to properties. Kang, as a listing broker, also prevented legitimate and higher offers from being made by artificially limiting the ability of others to bid on and buy properties. Kassai then sold the properties to third-parties at a substantial profit. Kang defrauded financial institutions and others of at least $2.7 million.

In addition to the prison term, Kang was sentenced to three years of supervised release and ordered him to forfeit $835,248 in proceeds of the scheme. Restitution will be determined at a later date.

Kang previously pleaded guilty before U.S. District Judge William J. Martini to an information charging him with one count of bank fraud and one count of wire fraud. Judge Martini imposed the sentence today in Newark federal court.

Rahul Agarwal, Attorney for the United States in this matter, announced.

Attorney for the United States Agarwal credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, special agents of the U.S. Department of Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, and the Bergen County Prosecutor’s Office, under the direction of Prosecutor Mark Musella, with the investigation leading to today’s sentencing.

The government is represented by Special Assistant U.S. Attorneys Charlie L. Divine and Kevin V. Di Gregory of the Federal Housing Finance Agency, Office of Inspector General.

 

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Man Sentenced for Defrauding Banks in Shotgun Mortgage Fraud Scheme

Stephanie Abbott —  April 22, 2021 — Leave a comment

Joseph A. Gonzalez, 46, Henderson, Nevada was sentenced 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 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 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.

Gonzalez previously pleaded guilty before U.S. District Judge John Michael Vazquez to Count One of an indictment charging him with one count of conspiracy to commit bank fraud. Judge Vazquez imposed the sentence today by videoconference. Gonzalez is the sixth person to plead guilty as part of the scheme.

In addition to the prison term, Judge Vazquez sentenced Gonzalez to three years of supervised release and ordered him to pay restitution of $512,500.

Acting U.S. Attorney Rachael A. Honig made the announcement.

Acting U.S. Attorney Honig 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 today’s sentencing.

The government is represented by Jason S. Gould, Acting Chief of the Violent Crimes Unit, and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.

 

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Man Charged with Mortgage Fraud

Stephanie Abbott —  April 22, 2021 — Leave a comment

Nathanael Zimmerman, 40, Wyckoff, New Jersey, was arrested today on charges of engaging in mortgage fraud, fraudulently obtaining an SBA loan, and stealing another person’s identity

According to the complaint:

From August 2013 through January 2014, Zimmerman orchestrated a scheme to engage in mortgage fraud concerning Federal Housing Administration (FHA)-insured loans. Zimmerman aided individuals in applying for FHA-insured loans and caused fraudulent representations to be made to the lenders, including submitting false bank statements. Zimmerman received a portion of the loan proceeds. Later, these unqualified individuals defaulted on their loans, causing losses to the U.S. Department of Housing and Urban Development of more than $300,000.

In 2020 Zimmerman used his deceased brother’s identity to obtain a U.S. Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL). Zimmerman received more than $150,000 by applying for EIDL funds in his brother’s name and using his brother’s personal identification information.

The charges of wire fraud affecting a financial institution and bank fraud are each punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million, or twice the gross profits or twice the gross loss suffered by the victims, whichever is greater. The charge of aggravated identity theft is punishable by a mandatory consecutive term of imprisonment of two years in prison and a fine of $250,000, twice the gross profits or twice the gross loss suffered by the victims, whichever is greater.

Acting U.S. Attorney Rachael A. Honig made the announcement.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., in Newark, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorneys Sammi Malek and Andrew Kogan of the U.S. Attorney’s Office Criminal Division in Newark.

The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.

 

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Mob Associate Sentenced for Real Estate Fraud Scheme

Stephanie Abbott —  April 13, 2021 — Leave a comment

Stephen Sharkey, 51, Swedesboro, New Jersey, was sentenced to four years and one month in prison, three years of supervised release, for stealing down payments for homes from two different families.

In September 2020, the defendant pleaded guilty to two counts of conspiracy to commit wire fraud, eight counts of wire fraud, one count of aggravated identity theft and, one count of money laundering in connection with three brazen and predatory frauds which greatly harmed innocent victims and netted the defendant more than $385,000. Sharkey engaged in two mortgage-closing schemes to defraud potential home buyers – stealing money that the victims had intended to use to purchase residences for themselves and their families. In the third scheme, the defendant stole all of the proceeds of the sale of a house by secretly going to closing without telling the seller.

Sharkey and his associate, Antonio Ambrosio, convinced their victims to provide Sharkey with the down payment funds in advance of the dates set for the real estate closings, with the promise that Sharkey would provide full financing for the purchases. Rather than finance the deals, Sharkey and Ambrosio simply stole the down payment money supplied by the victims and made excuses when the deals did not close. As part of the scam, Sharkey and Ambrosio even defrauded Ambrosio’s own brother-in-law out of $208,000. After receiving this money, Sharkey immediately cut checks to ARMM Investments, LLC, a company owned by George Borgesi. Borgesi and Sharkey were both convicted in United States v. Merlino, et al., 99 CR 363, an early 2000s RICO case in which the Philadelphia La Cosa Nostra was named as the enterprise. Borgesi was named as a capo of the Philadelphia LCN in that Indictment, and Sharkey was identified as a bookmaker for the mob.

After Sharkey and Ambrosio stole the down payment from Ambrosio’s brother-in-law, they proceeded to lure a second victim to use Sharkey to finance his mortgage, and the victim wired Sharkey $100,000, which Sharkey promptly converted to his own use. The deal for this property fell through, but Sharkey and Ambrosio induced the victim to send the seller an extra $25,000 to hold the deal open, claiming Sharkey would get the deal done. The victim sent the seller the $25,000, but Sharkey had already disposed of the earlier $100,000 and the deal never closed.

Finally, in the real estate fraud perpetrated on the seller victim, Sharkey promised the victim that Sharkey would sell the house belonging to the estate of the victim’s deceased parents and, after going to a closing the victim knew nothing about, Sharkey deposited all of the proceeds of the sale into his own bank account, stealing over $52,000 from the victim in the process.

Sharkey was ordered to pay $296,000 restitution and to forfeit the same amount of money.

Acting United States Attorney Jennifer Arbittier Williams made the announcement.

“Sharkey’s greed impacted the lives and security of multiple families, and his shameful actions had severe consequences for these innocent people,” said Acting U.S. Attorney Williams. “Not only did he and his associate steal mortgage down payments, but he also sold a different family’s house right out from underneath them and pocketed all of the cash. For his actions, he will now spend years in prison.”

“Real estate fraud was just the latest racket for Stephen Sharkey,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He blatantly preyed on innocent victims here, destroying two families’ plans of buying homes and stealing a third person’s inherited property. A chunk of these fraudulent proceeds was diverted to a longtime Philadelphia mob figure, underscoring Sharkey’s continued association with organized crime. The FBI and our partners are going to keep investigating and locking up those committed to making money through illicit means.”     

“This investigation once again reveals how members and associates of the Philadelphia La Cosa Nostra Organized Crime Family are constantly looking to make illicit financial gains by infiltrating legitimate business or exploiting regulatory rules as well as federal and state laws,” said Brandon Corby, Eastern Organized Crime Task Force Commander, Pennsylvania State Police. “The Pennsylvania State Police with our FBI partners are committed to eradicating this type of criminal behavior and hold those engaged in such activities accountable.”

The case was investigated by the Federal Bureau of Investigation’s Organized Crime Task Force and the Pennsylvania State Police, and is being prosecuted by Assistant United States Attorney Michael T

 

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Action to Stop Sham Mortgage Relief Scheme Announced

Stephanie Abbott —  January 6, 2021 — Leave a comment

Neal J. Vanderpoel II and Eileen P. Vanderpoel, Medford, New Jersey and their sons Ryan Vanderpoel, Medford, New Jersey and Neal J. Vanderpoel IV, Magnolia, New Jersey, as announced today, have been charged in a lawsuit to halt a scheme in which they operated multiple companies to defraud struggling homeowners by offering them mortgage adjustment services that provided no meaningful relief and often made their precarious financial situation even worse.

The State’s complaint alleges that the Vanderpoels’ advertised, offered for sale, and performed fraudulent or worthless loan modification and other debt adjustment services to New Jersey consumers through a web of corporate entities. The corporate entities include Financial Services for America; Financial Processing Services, LLC; Tri-State Financial Relief, LLC; and Mortgage Help and Loan Audits of America, LLC, which are also named as Defendants.

Through their corporate entities, most of which were not authorized to provide debt adjustment services in New Jersey, the Vanderpoels charged consumers up-front rates grossly in excess of the legal limits for permissible charges by licensed debt adjusters, netting them well over a million dollars in profits, the suit alleges.

After filling financially distressed consumers with false hope of guaranteed loan modifications, the Defendants failed to deliver, often causing consumers to fall further behind on their mortgage payments and making the threat of foreclosure more imminent, the suit alleges.

The State’s 18-count complaint alleges that the Defendants grossly exceeded the $25.00 fee cap imposed by the New Jersey’s Debt Adjustment and Credit Counseling Act by charging at least 556 New Jersey consumers $3,200 or more to prepare a “Forensic Audit Report,” which would purportedly assist consumers in their mortgage modifications.

The complaint also alleges that Defendants violated the New Jersey Consumer Fraud Act, advertising regulations, and the Nonprofit Corporations Act.

According to the complaint, the Defendants rarely if ever reviewed the consumers’ underlying notes or mortgage instruments and were not qualified to render opinions as to the legality of a consumer’s mortgage. The “Forensic Audit Report,” which Defendants generated using third-party compliance software, did not in fact assist consumers with their mortgage modifications, as promised by Defendants, and was largely worthless, the complaint alleges.

As a result of Defendants’ unconscionable and unlawful practices, consumers often forfeited all monies paid to Defendants, were forced to spend additional time and money to try to remain in their homes, were forced to file for bankruptcy, ended up losing their homes in foreclosure, and/or were forced to modify their loans on less favorable terms, the complaint alleges.

Today, the State also obtained a court order temporarily restraining Defendants from providing any loan modification or debt adjustment services, preventing Defendants from conducting business under unregistered assumed names, freezing all assets of Financial Services of America and the other corporate entities, and prohibiting Defendants from disposing of any assets derived from their purported mortgage modification businesses, among other relief.

The current action is brought against not only the current entities, but also against the family members individually. The State sought and secured temporary restraints in part to prevent the Vanderpoels and their companies from seeking to evade accountability as they had in the past.

Attorney General Gurbir S. Grewal and Department of Banking and Insurance (DOBI) Commissioner Marlene Caride made the announcement today.

“We have zero tolerance for predatory practices targeting vulnerable consumers who want nothing more than to stay in their homes, especially in the midst of a pandemic,” said Attorney General Grewal. “And by partnering with the Department of Banking and Insurance, as we are today, we are sending a message that we won’t hesitate to bring the full range of the State’s consumer financial protection laws to bear when we crack down on unconscionable consumer abuses.”

“Today was an important step in ending the deceitful practices perpetrated by these individuals and preventing other homeowners from falling victim to this scheme. These defendants took advantage of people already struggling financially and made their situations worse. The fact that they targeted our residents during a time when people are especially vulnerable makes their actions that much more reprehensible. With this action we are sending a message that those who engage in predatory and abusive practices will be held accountable,” said Commissioner Caride.

Today’s lawsuit reflects the Division of Consumer Affairs’ increased focus during the Murphy Administration on unconscionable practices in the markets for consumer financial products and services.

Those protections are especially important as the COVID-19 emergency enters its eleventh month. And the State’s complaint alleges that the Vanderpoels sought to capitalize on consumers’ financial insecurity by misleadingly suggesting that one of their companies offers services designed to address hardships caused by the COVID-19 pandemic.

“For most homeowners, the prospect of losing their homes is a time of stress and fear. In this lawsuit, we allege that these defendants callously preyed on that vulnerability,” said Paul R. Rodríguez, Director of the Division of Consumer Affairs. “Instead of helping homeowners out of a financial crisis, as they promised, defendants made it worse by causing people to fall further into debt as they paid for undelivered services with money that could have been applied to their mortgages.”

For the Division of Consumer Affairs, Deputy Attorney Donna J. Dorgan, Assistant Section Chief John Regina and Section Chief Patricia Schiripo of the Consumer Fraud Prosecution Section in the Division of Law’s Affirmative Civil Enforcement Practice Group and Assistant Attorney General Jeremy Hollander of the Affirmative Civil Enforcement Practice Group are handling the matter, with assistance from attorney Andrew Esoldi.  Investigator Brian Penn and Loretta Creggett and Supervising Investigator Jennifer Micco of the Office of Consumer Protection are handling the investigation for the Division

For the Department of Banking and Insurance, the matter is being handled by Deputy Attorney General Garen Gazaryan, Assistant Section Chief Nicholas Kant, Section Chief Richard E. Wegryn, Jr., and Assistant Attorney General Raymond R. Chance, III, in the Division of Law’s Financial Affairs Practice Group.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse can file an online complaint with the State Division of Consumer Affairs by visiting its website or calling 1-800-242-5846 to receive a complaint form by mail.

Consumers who have any issue or complaint concerning any entity regulated by the Department of Banking and Insurance, can contact the Department’s Consumer Hotline at 1-800-446-7467 or go to the Department website and click on Consumer Assistance – Inquiries/Complaints, at https://www.dobi.nj.gov

The mission of the Division of Consumer Affairs, within the Department of Law and Public Safety, is to protect the public from fraud, deceit, misrepresentation and professional misconduct in the sale of goods and services in New Jersey through education, advocacy, regulation and enforcement. The Division pursues its mission through its 51 professional and occupational boards that oversee 720,000 licensees in the state, its Regulated Business section that oversees 60,000 NJ registered businesses, as well as through its Office of Consumer Protection, Bureau of Securities, Charities Registration section, Office of Weights and Measures, and Legalized Games of Chance section.

 

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