Home Newark Press Releases 2013 President of Bogus Foreclosure Rescue Company Involved in Mortgage Fraud Pleads Guilty

President of Bogus Foreclosure Rescue Company Involved in Mortgage Fraud Pleads Guilty

U.S. Attorney’s Office February 13, 2013
  • District of New Jersey (973) 645-2888

NEWARK, NJ—An Ocean County man today admitted his role in a mortgage loan fraud scheme that succeeded in obtaining $4.4 million in mortgage loans while masquerading as a foreclosure rescue operation based in Holmdel, New Jersey, U.S. Attorney Paul J. Fishman announced.

Vito C. Grippo, 58, of Jackson, New Jersey, the president of Morgan Financial Equity Shares and Vanick Holdings, LLC, pleaded guilty before U.S. District Judge Kevin McNulty to an indictment charging him with one count of conspiracy to commit wire fraud, two counts of filing a false tax return for the years 2006 and 2007, and one count of aiding and procuring the filing of a false tax return for the year 2008.

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

Between January 2008 and February 2010, Vito Grippo held Morgan Financial out to the public as a company that could help homeowners who faced foreclosure on their homes through something Grippo called the Equity Share Program. As described by Grippo and his associates, the Equity Share Program involved creating a limited liability company (LLC) in the name of the homeowner’s house, in which the homeowner would supposedly own a 90 percent interest, with the rest to be owned by one or two private investors.

In reality, the so-called investors invested nothing and were instead straw buyers recruited by Vito Grippo or his son, Frederick “Freddie” Grippo, because they had good credit. The Grippos and their associates then applied for mortgages in the names of the “investors” for the purchase of the properties owned by the homeowners in distress. Freddie Grippo pleaded guilty to conspiracy to commit wire fraud before Judge McNulty on November 28, 2013.

A homeowner in distress would come to a closing in Vito Grippo’s office in Holmdel and be given a stack of documents to sign to prevent foreclosure. The homeowners frequently did not understand that they would be transferring title to their homes to the “investor.”

The so-called investor was in reality a straw buyer of the homeowner’s house. The new mortgage loan applications filled out by the Grippos or their associates in the name of one of the investors contained materially false information about the loan applicant’s monthly income, his assets and whether the residence to be bought would be applicant’s primary residence.

Once the new loan application was filled out, it would be submitted to Worldwide Financial Resources for processing where Freddie Grippo, a loan officer at Worldwide, would see to it that the loan was approved. Once the loan was approved and the loan money was wired to the settlement agent for a given transaction, Vito Grippo would direct the settlement agent to forward a portion of those loan proceeds to bank accounts that Vito Grippo controlled.

Properties that lost money through the Equity Share Program were found throughout the metropolitan area, including homes in Rutherford and Monroe, New Jersey and Brooklyn, New York.

For the year 2006, Vito Grippo did not report $289,780 in gross income from the activities of Vanick Holdings LLC. For the year 2007, he did not report $213,261; and for the year 2008, he did not report $1,366,261.

The conspiracy charge to which Vito Grippo pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million. Each of the three tax charges to which Vito Grippo pleaded carries a maximum penalty of three years and a maximum fine of $100,000. Sentencing is scheduled for May 29, 2013.

U.S. Attorney Fishman credited special agents from the FBI’s Red Bank Resident Agency, under the direction of Acting Special Agent in Charge David Velazquez in Newark; special agents from IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; and postal inspectors in the Newark Division, under the direction of Acting Inspector in Charge Maria Kelokates, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Bohdan Vitvitsky of the U.S. Attorney’s Economic Crimes Unit in Newark.

Defense counsel: Patrick N. McMahon Esq., Assistant Federal Public Defender, Newark

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