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Linda Cohen, 55, of Orange, said she was the settlement agent for fraudulent mortgage loans brokered by conspirator Klary Arcentales, 45, of Lyndhurst, on behalf of Premier Mortgage Services.
Arcentales, who worked as a loan officer for Premier, was indicted by a federal grand jury in May, along with other alleged co-conspirators.
Also facing charges connected to the case is former attorney Michael Rumore of Lyndhurst (SEE: Feds arrest ex-Lyndhurst lawyer in $30 million mortgage fraud).
After targeting properties in poor neighborhoods in Belleville, Nutley, Irvington and Linden, federal authorities said, those involved recruited straw buyers and ginned up supporting documents for mortgage applications for them that made it appear they could afford far more than they did.
They then split the proceeds by using fraudulent settlement statements known as “HUD-1” reports, which U.S. Attorney Paul J. Fishman said “hid the true sources and destinations” of the bank funds that covered the mortgages.
“Once the money was entered into accounts they controlled, the defendants shuttled funds among various other accounts, in amounts greater than $10,000 per transaction,” Fishman said.
In turn, many of the properties went into foreclosure, he said.
As closing agent, Cohen admitted furthering the scheme by “convening closings, receiving funds from lenders, and preparing ‘HUD-1’ reports that purported to reflect the sources and destinations of funds for mortgages on subject properties,” the U.S. Attorney said.
The reports were neither true nor accurate, federal authorities said.
For instance, a complaint on file in U.S. District Court in Newark says, Cohen “routinely certified HUD-1s in which she purported to have received a down payment from the buyer when no down payment had been made.”
She then gave the mortgage loan proceeds directly to Premier Mortgage Services, Arcentales, and other co-conspirators, the government said.
She also created shell bank accounts “into which she funneled the proceeds of her fraudulent activity,” Fishman said.
Fishman credited special agents of the FBI and IRS-Criminal Investigation for Cohen’s plea, secured by Assistant U.S. Attorneys Zach Intrater and Rahul Agarwal, of one count of conspiring to commit bank fraud and one count of transacting in criminal proceeds.
He also thanked the Social Security Administration-Office of Inspector General for its role in the investigation.
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