September 19, 2021

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Mortgage News

Man jailed for $9 million shotgun HELOC fraud scheme

An eight year series of fraudulent requests for Home equity Lines of credit (HELOCs) have jailed a Nevada man for 18 months.

Joseph A. Gonzalez, 46, pleaded guilty to the bank fraud conspiracy, will be released under custody for three years along with prison sentence and paid $ 512,500 in refunds.

He is the sixth person to plead guilty of participating in a program of misinformation use and simultaneous loan applications to multiple banks.

The practice known as “shooting” has been used to apply for more than $ 9 million in residential real estate loans in New Jersey and New York.

The mortgage fraud ran from 2010 to 2018. Court documents indicate that Jorge Flores and Simon Curanaj directed the program. Curanaj is a former real estate agent and has pleaded guilty.

Gonzalez previously lived in one of the residences but was not the owner. He recruited a person with a good credit rating as a straw buyer and transferred – without the knowledge of the owner – a quitclaim deed, which contains no guarantees of ownership, to the straw buyer. Signatures on the certificate were forged.

The HELOC claims made on the buyer’s behalf exceeded his income and did not reveal any unrecognized senior mortgage liens on the property or that it was being used as collateral for another line of credit.

Banks paid out more than half a million dollars in loans, most of which was shared between Flores, Gonzalez, and others. Gonzalez used part of the funds to buy a luxury car valued at $ 43,000.

The straw buyer eventually defaulted on the loan.