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TRENTON
– Attorney General Paula T. Dow and
Criminal Justice Director Stephen J. Taylor
today announced charges against a Kearny
woman who allegedly orchestrated a scheme
to steal millions of dollars by obtaining
mortgage loans using false identities and
counterfeit documents.
According
to Director Taylor, Genilza R. Nunes, 36,
of Kearny, was arrested on March 9 by detectives
of the Division of Criminal Justice Major
Crimes Bureau as a result of an ongoing
investigation into the conspiracy. She was
charged by complaint with first-degree conspiracy,
first-degree money laundering, second-degree
securities fraud and second-degree theft
by deception. She has been held in state
custody since that time with bail set at
$2 million.
Because
the investigation by the Division of Criminal
Justice is ongoing, the charges were not
announced until today. Nunes was charged
today with other defendants in a federal
investigation into related activities announced
by the U.S. Attorney’s Office and
FBI in Newark.
The
state investigation by the Division of Criminal
Justice Major Crimes Bureau determined that
Nunes and a number of co-conspirators allegedly
were involved in a sophisticated, multi-million
dollar mortgage loan fraud scheme operating
in northern New Jersey, including Morris,
Hudson, Union and Essex Counties. The fraudulent
enterprise allegedly included licensed and
unlicensed professionals, including real
estate agents, mortgage loan brokers, real
estate appraisers, notaries, lawyers, straw
buyers and counterfeit document makers.
Nunes
allegedly was one of the people responsible
for creating phony documents, including
false identification cards, fraudulent financial
documents, inflated real estate appraisals,
altered real estate transfer documents,
and fraudulent government documents, including
U.S. passports and numerous state motor
vehicle licenses. Nunes and others involved
in the scheme used false names and the fraudulent
documents to disguise their true identities.
Nunes
and her co-conspirators allegedly defrauded
numerous lending institutions of millions
of dollars through what is known as a “short
sale mortgage loan property flip scheme.”
A “short sale” is a type of
pre-foreclosure sale of real estate where
the lender holding the mortgage agrees to
permit the property to be sold for a price
less then the amount due on the mortgage
loan. Short sales have become more prevalent
due to the recent economic downturn.
In
this case, individuals involved in the scheme
were purchasing the properties as straw
buyers, using false identities supported
by counterfeit driver’s licenses,
false financial records, and fictitious
credit histories. Through a series of fraudulent
transactions, the short sale properties
were then sold or “flipped”
at inflated values derived from fraudulent
appraiser reports. A second straw buyer
applied for a mortgage loan on the inflated
property and obtained the loan under a false
identity. The short sale property was then
purchased with the loan proceeds, and, by
design, the straw buyer made no payments
on the loan, causing a loan default.
Because
the straw buyer used a false identity, the
lending institution was unable to locate
the borrower. The difference between the
sales price for the short sale transaction
and the inflated loan obtained represented
the net proceeds of the fraudulent scheme.
Typically Nunes and her co-conspirators
obtained $100,000 to $300,000 per transaction.
The
state alleges Nunes was responsible for
cultivating and creating straw buyers, including
real and fake persons, for the purpose of
engaging in the scheme. The state has specifically
alleged that Nunes engaged in fraudulent
transactions involving five properties,
with a total fraud of $2,152,800. However,
it is believed that the scheme is much larger.
The investigation is continuing and additional
charges are anticipated.
The
investigation is being conducted and coordinated
by Detective Sgt. Louis A. Matirko and Deputy
Attorney General Marysol Rosero of the Division
of Criminal Justice Major Crimes Bureau.
First-degree
crimes carry a maximum sentence of 20 years
in state prison and a $200,000 fine, while
second-degree crimes carry a maximum sentence
of 10 years in state prison and a $150,000
fine. The first-degree money laundering
charges carry a period of parole ineligibility
equal to one-third to one-half of the prison
sentence imposed and a fine of up to $500,000.
The
complaint is merely an accusation and the
defendant is presumed innocent until proven
guilty. Because Nunes is charged with indictable
offenses, the charges will be presented
to a grand jury for potential indictment.
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