Loan Officer and Straw Purchaser Admit Roles in Multi-Million-Dollar Mortgage Fraud
|U.S. Attorney’s Office September 27, 2013|
CAMDEN, NJ—A loan officer and a straw purchaser today admitted they conspired to defraud financial institutions as part of a multi-million-dollar mortgage fraud scam to make illegal profits on over-developed condominiums in the Wildwood, New Jersey area, U.S. Attorney Paul J. Fishman announced.
Michelle Martinez, 49, of Brick, New Jersey, and Dana Rummerfield, 47, of Los Angeles, California, each pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court. Martinez pleaded guilty to an information charging her with conspiracy to commit wire fraud. Rummerfield pleaded guilty to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.
According to documents filed in this case and statements made in court:
Conspirators identified homes in Wildwood and Wildwood Crest, New Jersey, and recruited straw buyers to purchase those properties at inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. Martinez created fraudulent loan applications that contained false information about the straw buyers’ employment, income, assets, and intended uses of the properties. Martinez’s actions were designed to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Martinez and her conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Martinez’s conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled from the fraudulent mortgage loans and/or lines of credit on several properties. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.
Rummerfield and others falsified his loan application with respect to his employment, income, and assets in order to cause the lender to make a loan to Rummerfield for a property he was purchasing in Wildwood Crest, New Jersey. Rummerfield took a portion of the fraudulent mortgage proceeds by having a check totaling $100,000 deposited into an account for Hot House Properties, a company he controlled.
The wire fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Martinez and Rummerfield are scheduled to be sentenced on March 12, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, Newark Field Office, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.