TRENTON, NJ—A father and son were arrested this morning for engaging in a scheme that used straw buyers and short sales on two Bergen County properties to defraud mortgage lenders out of hundreds of thousands of dollars, U.S. Attorney Paul J. Fishman announced.

George Bussanich Sr., 56, of Park Ridge, New Jersey, and George Bussanich Jr., 35, of Upper Saddle River, New Jersey, are charged by indictment with one count of conspiracy to commit bank fraud and two counts of bank fraud. They are scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

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

Between 2009 and 2012, Bussanich Sr. and Bussanich Jr. allegedly conspired to defraud mortgage lenders through the sham short sales of two properties located on Jefferson Avenue in Emerson, New Jersey and Lillian Street in Park Ridge.

Bussanich Sr. controlled various purported medical clinics and surgical centers in New Jersey. He recruited his business partner and an employee from a sleep clinic in Cliffside Park, New Jersey, to pose as legitimate, unrelated buyers of the properties. In order to conceal his involvement, Bussanich Sr. used a business entity he controlled to fund each short sale transaction and the subsequent repurchase of those properties. Bussanich Jr., the record owner of both properties, negotiated the short sales with the lenders using materially false information that misrepresented the circumstances of the short sales, the relationships of the parties and the source of funding for the transactions.

Approximately two years after the fraudulent short sales, Bussanich Sr., bought the properties back from the straw purchasers using money that he owed the aforementioned business partner from a prior business venture.

Each count in the indictment carries a maximum of potential penalty of 30 years in prison and a $1 million fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.