The co-owner of a mortgage company that was responsible for a long-running,
large-scale mortgage fraud scheme that caused millions in losses has been sentenced to 21 months in prison, U.S. Attorney Paul J. Fishman announced.
Lester Soto, 59, of Freehold, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with two counts of conspiracy to commit bank fraud. Salas imposed the sentence in Newark federal court. In addition to the prison term, Salas ordered Soto to serve five years of supervised release and to pay restitution of $3,745,344.
According to documents filed in this and other cases, as well as statements in court, from September 2006 to May 2008, Soto and others, including fake document creators, a complicit lawyer and a paralegal, and numerous loan officers, engaged in two related mortgage fraud conspiracies through a company called Premier Mortgage Services (Premier). Soto and his
conspirators targeted properties in low-income areas of New Jersey. After recruiting “straw buyers,” Soto and his conspirators used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets and income than they actually did.
Soto and his conspirators 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. Soto and his conspirators 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 straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings.
Besides being a part-owner of Premier, Soto also acted as a loan officer on certain Premier mortgage loan applications and took a percentage of Premier’s profits. Soto employed document makers to create false and fraudulent documents and put mortgage brokers at Premier in contact with these document makers to create other false and fraudulent documents. Soto
instructed Premier employees to provide him with loan files that Premier employees believed contained suspicious information and then personally shepherded these loan files through to funding.
Other conspirators, including Isaac DePaula, 36, of Brazil, Adilson Silva, 50, of Union, and Klary Arcentales, 47 of Lyndhurst, were loan officers at Premier.
DePaula, Silva and Arcentales 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 Premier for each mortgage loan 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.
Rodrigo Costa, 35, of Brazil, created false and fraudulent documents, including
Verifications of Deposit and Verifications of Rent. Other defendants, including DePaula and Silva, then submitted Costa’s fraudulent documents to support the fraudulent mortgage loan applications of various straw buyers. For his participation, Costa received a portion of the illicit proceeds from the mortgages.
Michael Rumore, 57, of Toms River, was an attorney licensed in New Jersey. Rumore served as the settlement agent on mortgage loans brokered by DePaula, Silva and Soto for various subject properties.
Rumore used his status as an attorney to further the fraudulent scheme, including by convening closings, receiving funds from lenders and preparing HUD-1s that purported to reflect the sources and destinations of funds for mortgages on subject properties when in fact, the HUD-1s were neither true nor accurate.
Rumore disbursed mortgage loan proceeds directly to Premier, Soto, DePaula and Silva, including amounts not reflected on the HUD-1s. Rumore received a fee for each fraudulent loan in which he participated.
Antonio Pimenta, 48, of Neshanic Station, owned and managed Kelmar
Construction Co., which built properties that were then sold to straw buyers using fraudulent mortgage loans brokered by Arcentales.
Arcentales, one of the loan officers who provided fraudulent documents to financial institutions on behalf of straw buyers, was sentenced on March 28 to 18 months in prison. Linda Cohen, 58, of Orange, a paralegal who served as the settlement agent on mortgage loans brokered by Arcentales for various properties, was sentenced on March 30 to six months in prison, according to the U.S. Attorney.
