CAMDEN – Kathryn Lockwood, Frederic Diantonio and Louis V. Catarro had a scheduled Status Hearing in Federal District Court in Camden Dec. 9 before Judge Renee Marie Bumb. The Cape May County residents have pled “not guilty” after being indicted by a grand jury in January of this year.
The charges involve accusations of conspiracy “to devise, scheme and defraud Housing and Urban Development (HUD) of $15 million.” The grand jury findings included the names of several unindicted co-conspirators including Cape May county resident, real estate developer and attorney Louis Dwyer of Sun Ray Beach and Thunderbird Development. The grand jury alleges that mortgage lenders, many from Pennsylvania and some from New Jersey, conspired with mortgage brokers, developers and Realtors to defraud banks and ultimately taxpayers. The indictment alleges that they did this by obtaining mortgage loans from unqualified borrowers using fraudulent loan applications. HUD set up the Insurance Program to Promote Home Ownership in order to encourage private lenders to provide mortgage loans to borrowers who did not have enough money for a down payment or adequate credit. It also states that some of the buyers were given kickbacks.
The federal program protected the private lenders from any loss and shifted the risk from them to the taxpayer. This is similar to the government bailout of the big banks in 2008. The alleged conspiracy, the grand jury said, took place between May 2006 and June 26, 2008.
Financially distressed developers who overbuilt in North Wildwood and Wildwood were offering the properties. Many of those initially arrested have agreed to co-operate with the government for as yet possible undisclosed deals.
Lockwood, Diantonio and Catarro maintain their innocence. Charles Nugent, attorney for Lockwood, stated that Lockwood of the Hoffman Agency North, at all times acted with the highest ethics and practices of her profession. He said that Lockwood never “phonied up” documents or advised prospective buyers to lie or conspired with others to defraud lenders or the federal government to obtain the insurance monies; she always acted in her normal capacity as a Realtor and received normal compensation.
The questions that should be asked, the defense reasons, is who stood to gain the most from any alleged scheme to obtain HUD insurance monies – a realtor on commission or a developer riding himself of an underwater property whose sale price was inflated.
Presumably these and other questions will be answered by a jury sometime in the next year. All the parties are scheduled to be back in court Feb. 14, 2014.
To contact Helen McCaffrey, email hmccaffrey@cmcherald.com.
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