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Both were arrested at the same time a year ago, and Celestine would no doubt testify against Simon if the case went to trial. Celestine isn’t scheduled to be sentenced until Nov. 22. Simon already was facing similar charges out of Brooklyn.
The case, investigated by the FBI, and presented to the grand jurors by Assistant U.S. Attorney Donna Gallucio, outlined a scheme in which homeowners facing foreclosure were offered an opportunity to keep their properties and repair their damaged credit.
All they had to do, the indictment alleges, was sign over their homes to straw purchasers with artificially boosted credit who, they were promised, would transfer the titles back to them in six months to a year. Meanwhile, Simon and Celestine pledged to help the original owners improve their credit.
“Simon and Celestine typically told the homeowners that the equity withdrawn from their properties would be kept in a separate account and used to pay the mortgages and expenses on their homes,” said Galluccio, of of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
“After the homeowners were signed up, Simon and Celestine recruited individuals with good credit scores to act as straw buyers and paid them about $10,000 per property,” she added. “Using the homeowners’ properties and the good credit ratings of the straw buyers, Simon and Celestine applied for mortgages in the names of the straw buyers to extract the maximum available equity from the homes.”
To make sure their scheme worked, she said, Simon and Celestine increased the straw buyers’ “credit-worthiness” by filing loan applications to mortgage lenders with bogus information, including employment history and income.
“They also falsely stated that the straw buyers intended to occupy each home as their primary residence, though the original homeowners still planned to live in them,” Galluccio said in the release.
After the lenders wrote the business, the pair paid the necessary fees at closing — and walked off with about $1.5 million, the government said. In some cases, the FBI said, multiple mortgages were written on the same homes.
Once the loans defaulted, innocent people lost their homes.
It’s time for the scam artists to begin paying for their crimes. But federal authorities want the cases to also serve as warnings: Research the credentials of anyone you intend to do business with in the mortgage and real estate industry.
And if you feel hinky, call the feds. That’s what they’re there for.
READ THE ORIGINAL ARREST STORY, PUBLISHED IN CLIFFVIEW PILOT: HERE
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