NEWARK – A paralegal for a New Jersey attorney who conducted real estate closings in connection with a fraudulent scheme involving NJ Affordable Homes, Corp. (NJAH), a purported real estate investment company, pleaded guilty Tuesday to falsifying loan documents which were submitted to a mortgage company for a loan insured by the U.S. Department of Housing and Urban Development, U.S. Attorney Christopher J. Christie announced.
Sydney Raposo, 41, of Rahway, who served as a paralegal for a lawyer identified by the initials A.N., whose law firm was located in Cranford, pleaded guilty to a one-count Information, charging her with making false statements to HUD relating to a federally insured mortgage loan issued by a mortgage lender.
In a hearing before U.S. District Judge Jose L. Linares, Raposo admitted to preparing materially false and fraudulent HUD-1 Universal Settlement Statements that falsely showed that A.N.’s clients – who were merely “nominee buyers” – had paid money to purchase the properties, and thus had equity in the properties, when she, and A.N., knew they had not.
As part of the scheme, Wayne Puff, NJAH’s founder and owner, recruited the nominee buyers, buyer’s who were “in name only,” to serve as supposed bonafide purchasers of real estate properties, many of which were located in Irvington and Newark. The buyers, however, did not pay money in connection with the purchases, although the closing documents which were submitted to the mortgage lenders and HUD falsely stated they did. Puff is currently in federal custody after being charged with allegedly masterminding the fraudulent scheme which caused over $75 million in losses to investors and mortgage lenders.
At the instruction of A.N., from March 2003 to Sept. 12, 2005, Raposo prepared false documents which she knew were to be submitted to mortgage lenders, and that the loans were insured through the Federal Housing Administration, a division of HUD which administered mortgage loan insurance in order to assist low and moderate income borrowers, according to the Information. In addition, again at the direction of A.N., Raposo admitted that in March 2005, she falsified a HUD Settlement Statement for the purchase of a property in Newark which falsely stated that the nominee buyer had paid more than $16,000 to serve as equity and satisfy other settlement charges when the buyer, in fact, paid nothing.
Raposo is the eighth defendant associated with the investigation of NJAH to plead guilty to federal charges, according to Robert Kirsch and Justin W. Arnold, the Assistant U.S. Attorney’s who are handling the prosecutions.
Raposo’s guilty plea for submitting false information to HUD carries a statutory maximum term of imprisonment of two years, and a $250,000 fine, Kirsch and Arnold said. Judge Linares scheduled Raposo’s sentencing for Jan. 5, and released her on a $50,000 unsecured bond pending sentencing.
The eight convictions to date stem from a criminal referral made by the U.S. Securities and Exchange Commission’s Enforcement Division and result from a combined investigation by the FBI, HUD and the U.S. Postal Inspection Service.
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