Man pleads guilty to scheme that cheated mortgage lenders out of more than $10M

Source: The Star-Ledger

A Piscataway man who owned and ran foreclosure-rescue companies pleaded guilty today to his role in a mortgage-fraud scheme that cheated mortgage lenders out of more than $10 million, federal authorities said.

Ronald Harris Jr., 41, pleaded guilty before U.S. Magistrate Judge Patty Schwartz in Newark to a one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering, said U.S. Attorney Paul J. Fishman.

According to documents filed in the case and statements made during the hearing, Harris admitted he duped mortgage lenders into believing they were lending money to credit-worthy people when, in fact, those people were straw-man" buyers.

Harris owned and operated Harris Capital and Skyline Capital Group, both businesses that operated out of Newark — and later Maplewood — and that purported to be foreclosure-rescue companies, authorities said.

Harris admitted that he and others — including Harris Capital employee Sterling Bruce, 37, of Newark — fraudulently promised to help homeowners avoid foreclosure and repair their bad credit by allowing their homes to be put in the names of "straw" buyers, who would help them obtain more favorable mortgages and improve their credit ratings, authorities said. The homeowners were told that titles to their homes would be returned to them, authorities said. Meanwhile, authorities said, the straw buyers were told they’d be helping someone save a home and would make money by selling the property back to the original owner after a year.

Authorities said Harris, Bruce, and Pia Perkinson, 39, of Parlin – who was a mortgage loan officer at different mortgage loan companies – then had loan applications sent in the straw buyers’ names to mortgage lenders.

Those involved in the scheme then submitted loan applications that misstated information about the straw buyers, including information about their employment, income and assets. In fact, many of the straw buyers’ loan applications falsely said they worked for one of Harris’ companies, making a substantial salary.

Before closing the fraudulent transactions, Harris and Bruce regularly filed fraudulent liens for tens of thousands of dollars on the properties, authorities said. At the closings, the liens would be paid off with money gotten from the fraudulently obtained loans and Harris and Bruce would make money off the deal, authorities said.

Harris and his co-conspirators caused lenders to fund dozens of fraudulent loans that totaled more than $10 million, authorities said, with Harris getting about $1,145,993.

Bruce and Perkinson already pleaded guilty to their roles in the scheme.

Harris faces up to of 30 years in prison and a fine of up to $1 million on the wire fraud conspiracy count, and up to 20 years in prison and a fine of up to $250,000 on the money laundering conspiracy count. Sentencing is scheduled for Sept.13.

URL to original article: http://www.housingwire.com/2011/05/18/man-pleads-guilty-to-scheme-that-cheated-mortgage-lenders-out-of-more-than-10m

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