CAMDEN — In the on-going investigation of a mortgage fraud scheme that involved multiple real estate deals in the Wildwoods as well as in South Carolina, 10 people were arrested Thur. Aug. 9 and charged by the Federal Bureau of Investigation and the Internal Revenue Service for their roles in a $40-million mortgage fraud scheme that used phony documents and straw buyers to make illegal profits on condominiums and resort destinations.
Listed in the indictment are 28 properties in Wildwood Crest, including one unit in Vista Mar Condominiums, nine units in Silver Dollar Condominiums, seven units in Ebb Tide Condominiums and 11 in Stockton Beach House Condominiums. Mortgage funds released for these properties range from $1,143,127 to $464,188.
Charged in indictment were: Joseph Witkowski, 66, of Flemington, Robert Serao , 46, of Bayville, Catherine Pearson, 53, of West Orange, Istau Tejan-Sie, 54, of Long Branch, Crystal Brame, 42, of Irvington, Karen Yokely, 59, of Plainfield, George Lachenmayr, Jr., 79, of Irvington, Aku I. Muhammad, 42, of Newark, Mark Kreischer, 33, of Elmwood Park and Marc Jacobs, 47, of Hackettstown.
All 10 defendants have been charged by indictment with conspiracy to commit wire fraud. Witkowski is also charged with conspiracy to commit money laundering.
The indictment states Witkowski and the alleged conspirators located for purchase condominiums overbuilt by financially distressed developers, properties in resort destinations in South Carolina and Georgia and other properties in New Jersey.
Witkowski, Pearson, Tejan-Sie and Brame recruited straw buyers, including Lachenmayr, Muhammad, Kreischer and Jacobs to purchase those properties. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators, including Pearson, created false documents such as fake W-2 forms, income tax returns and investment statements to make the straw buyers appear more creditworthy than they actually were in order to induce lenders to make the loans.
To prepare the straw buyers’ false loan applications, Witkowski and his conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers, including Serao, that the brokers knew were false, attributing to the straw buyers inflated income and assets. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Witkowski and his conspirators took a portion of the proceeds by having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.
Many of the conspirators not charged in the indictment have already pleaded guilty to the mortgage fraud scheme, Charles Harvath, 33, of Lodi, Stephen Cobra, 36, of Farmingdale and William Brown, 60, of Newark pleaded guilty to Informations charging them each with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Harvath, Corba and others located distressed properties, recruited straw buyers and created false documents in order to inflate the straw buyers’ qualifications as part of the scheme. Sentencing for Brown is scheduled for Sept. 6; sentencing for Harvath and Corba is to be scheduled.
John Siuszko, 56, of Wharton and Michael Williams, 34, of Jersey City pleaded guilty last year to Informations charging them with conspiracy to commit wire fraud. Siuszko and Williams served as straw buyers, with lenders releasing $980,000 and $632,000 respectively, based on fraudulent mortgage loan applications. Siuszko was sentenced to 18 months in prison, to be followed by two years of supervised release, ordered to forfeit $40,000 and ordered to pay a $5,000 fine. Sentencing for Williams is to be scheduled by the court.
The wire fraud conspiracy charge carries a potential maximum sentence of 30 years in prison and a $1-million fine. The money laundering conspiracy charge carries a maximum potential sentence of 10 years in prison and a $250,000 fine.
Click below for copy of indictment:
http://filetransfer.cmcherald.com/h_uploads/Witkowski_Joseph_et_al_Indictment.pdf