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As part of his plea deal with the government, Charles Harvath, 33, agreed to surrender $2.4 million of ill-gotten gains.
Harvath said he and his cohorts targeted oceanfront condominium complexes overbuilt by financially distressed developers, as well as premier real estate in vacation destinations — including Hilton Head, South Carolina — and properties in New Jersey owned by financially distressed homeowners facing foreclosure.
The condo complexes in Wildwood Crest included The Silver Dollar, the Ebb Tide, Stockton Beach House and Vista Mar.
The crew enlisted straw buyers who, despite having good credit scores, didn’t have the assets to qualify for loans.
Horvath and his partners paid the recruits for use of their identities, then gave lenders phony W-2 forms, income tax returns, investment statements, and rental agreements to make them appear credit-worthy, the government said.
Harvath and his cohorts also set up several company telephone lines so that they could “verify” employment for the straw purchasers, federal prosecutors said.
Once the loans were approved and the mortgage lenders sent payments, Harvath “had some of the funds wired or checks deposited into various accounts that he and his co-conspirators controlled,” the government said.
Scammed by the crew were banks and mortgage companies from New York to Parsippany, Red Bank and Hasbrouck Heights to the Carolinas, Georgia and Louisiana, to Colorado Springs, San Francisco and Seattle.
The scheme involved no fewer than 20 co-conspirators, nearly all from New Jersey. Some provided information to the government and weren’t charged. Six were, however.
They include a former South Carolina mortgage loan officer at Carolina First Bank on Hilton Head Island who was sentenced to 20 months in federal prison and ordered to pay $6.7 million that he got through the scheme. Blair Witkowski was looking at 30 years, but the government cited his cooperation.
Harvath, however, is potentially looking at several years in prison and up to $1.25 million in fines when he is sentenced on Oct. 25 by U.S. District Court Judge Joseph E. Irenas in Camden.
U.S. Attorney Paul J. Fishman credited special agents of the FBI’s Atlantic City Resident Agency and of the IRS’ Criminal Investigation unit in Mays Landing for making the case, which is being prosecuted by Assistant U.S. Attorney R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.
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