TRENTON – A Monmouth County man has pleaded guilty in a scheme in which he stole more than a million dollars by promising to rescue homeowners who were facing foreclosure, but instead sold their homes to unwitting investors. His son previously pleaded guilty in the scheme, Attorney General Jeffrey S. Chiesa announced.
Vito Grippo, 58, of Jackson, pleaded guilty on Feb. 27 to a criminal accusation charging second-degree theft by failure to make required disposition of property received and third-degree money laundering before Superior Court Judge John Triarsi in Union County.
Grippo’s son, Frederick P. Grippo, 32, of Old Bridge, pleaded guilty on Jan. 23 to a criminal accusation charging second-degree theft by deception.
According to the plea agreement, the state will recommend that Vito Grippo be sentenced to ten years in state prison and that Frederick Grippo be sentenced to four years in state prison. In addition, Vito Grippo was ordered to pay full restitution. Frederick Grippo was ordered to pay $24,681 in fines.
“This father and son ripped off struggling homeowners at the height of the national housing crisis,” Attorney General Chiesa said. “My office will continue to seek out those who prey upon unsuspecting homeowners and will prosecute these offenders to the full extent of the law.”
“This case is the latest in our ongoing effort to target and prosecute large-scale mortgage fraud schemes,” said Elie Honig, Director of the Division of Criminal Justice. “These schemes injure not only the unwitting homeowners who fall prey, but also our financial system as a whole.”
The defendants were arrested on Sept. 27, 2012. The charges are the result of an investigation by the Division of Criminal Justice Financial & Computer Crimes Bureau. The investigation was conducted for the Division of Criminal Justice by Supervising Deputy Attorney General Francine S. Ehrenberg, Deputy Chief of the Financial & Computer Crimes Bureau, Detective Eric Ludwick, retired Detective Martin Farrell, and retired Sgt. Robert Walker. Deputy Attorney General Mark Kurzawa represented the Division of Criminal Justice at the guilty plea hearings.
Vito Grippo had an office in Holmdel and operated several companies, including Morgan Financial Equity Shares, Inc., Jandevar, LLC, and Vanick Holdings, LLC. In pleading guilty, Grippo admitted that between Feb. 14, 2008 and Jan. 7, 2010, he stole $1.3 million by soliciting 12 financially distressed homeowners, saying he could rescue them from foreclosure and fix their credit rating by transferring title to their homes temporarily to a company called Morgan Financial.
An investigation by the Division of Criminal Justice determined that Grippo misrepresented that the homeowner would retain an 80 to 90 percent interest in the home, while Morgan Financial and an investor would share the remaining 10 to 20 percent interest. The investigation further determined that Vito Grippo told the homeowners to make their monthly mortgage payments to Morgan Financial, and Morgan would pay the lender, reducing their payments over time and giving them back full title to their homes in a year. He later sent letters to the homeowners telling them their mortgage payments had greatly increased.
Vito Grippo also admitted that he solicited investors who were led to believe that they would be investing through Morgan Financial in income-generating rental properties. The investors did not know that they were actually buying the homes outright. He allegedly misused the identities of the investors to file fraudulent mortgage applications to purchase the homes.
In pleading guilty, Frederick Grippo, who was a loan broker, admitted that he submitted fraudulent applications in order to further the scheme. An investigation determined that the defendants created and submitted false documents for investors, including W-2 forms and bank statements, and falsely asserted that the investors planned to live in the homes as their primary residences. Vito Grippo had both the original homeowners and the investors sign documents without giving them time to ascertain what they were signing.
Vito Grippo admitted to his role in the scheme in connection with 12 homes in Elizabeth, N.J., Brooklyn, N.Y. (3 homes), Jersey City, N.J., Staten Island, N.Y. (2 homes), Rutherford, N.J., Monroe, N.J., Somerville, N.J., Mine Hill, N.J., and Cambria Heights, N.Y. The investigation determined that he submitted fraudulent loan applications to obtain a total of more than $4.5 million to purchase the homes. Vito Grippo in turn stole more than $1.3 million in loan proceeds that should have been disbursed to the original homeowners as equity at closing. He diverted those funds into his companies’ bank accounts in order to launder the money. The investigation determined that he then disbursed the funds to himself and other co-conspirators. Frederick Grippo was involved in seven of the fraudulent loan applications and received checks from Morgan Financial for his participation in the fraud. Although Vito Grippo made some mortgage payments on the loans in the names of the investors, all of the homes ultimately fell into foreclosure. The original homeowners lost the properties and the investors’ credit ratings were ruined.
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