The lawyer, Mark J. Bellotti, 55, of Marlboro, pleaded guilty yesterday to second-degree charges of conspiracy and theft by deception before Superior Court Judge Anthony J. Mellaci Jr. in Monmouth County. Under his plea agreement, the state will recommend that Bellotti be sentenced to five years in state prison and be ordered to pay a fine of $100,000.

The broker, Jonathan P. Domash, 41, of Marlboro, owner of Diversified Assets, LLC, pleaded guilty yesterday to a charge of third-degree theft by deception. Under his plea agreement, the state will recommend that Domash be sentenced to 364 days in jail and five years of probation.

In pleading guilty, Bellotti and Domash admitted that they conspired to falsify mortgage loan applications to cause banks to provide loans to unqualified home buyers. The two men were charged in an April 11, 2011 state grand jury indictment stemming from an investigation by the Division of Criminal Justice Financial & Computer Crimes Bureau. Deputy Attorney General Valerie A. Noto took the guilty pleas for the Division of Criminal Justice.

“These defendants exploited all parties to these fraudulently arranged mortgage loans, dooming unqualified home buyers to foreclosure and lenders to major losses, while they ran off with enormous fees,” said Attorney General Chiesa. “With these guilty pleas, we are putting these con artists behind bars, where they belong.”

“We’re aggressively targeting financial fraud, which is particularly destructive during this time of economic turmoil, when many are vulnerable and may jump too quickly at a chance to get ahead,” said Stephen J. Taylor, Director of the Division of Criminal Justice. “We urge investors to use caution and report suspicious schemes to us.”

The indictment charged Bellotti and Domash in connection with seven mortgage loans totaling $2,671,400. A third defendant named in the indictment, Leonardo A. Hernandez, 40, of Hillsborough, pleaded guilty yesterday to an amended count of the indictment charging theft by deception as a disorderly persons offense. He admitted that he submitted false information and documents in connection with several of the loans. Hernandez faces a sentence of probation. Charges remain pending against three other individuals who were charged in the indictment for allegedly assisting Bellotti and Domash. Additional defendants may also face charges.

Judge Mellaci scheduled sentencing for Bellotti and Domash for July 13, and scheduled sentencing for Hernandez for April 5.

The investigation revealed that Domash, Bellotti and Hernandez falsified information about employment, earnings and bank account balances on mortgage loan applications so that home buyers could obtain loans for which they were not qualified. They also falsified U.S. Department of Housing and Urban Development (HUD) settlement forms.

The defendants submitted fraudulent loan applications and HUD documents between April 2006 and June 2007 to obtain mortgage loans in the following amounts for seven homes in these locations: Hillsborough ($540,000), Plainfield ($342,000), Marlboro ($339,150), Keansburg ($351,500), Asbury Park ($384,750), Asbury Park ($374,000), and Newark ($340,000).

The investigation revealed that Domash would find homeowners who were eager to sell, and then convince buyers to invest in the homes as income properties through his company, Diversified Assets, LLC. He had buyers sign blank loan applications, so he and other defendants could falsify the buyers’ personal financial information. Bellotti handled the closings for the home sales, performing separate closings with the buyers and sellers. The defendants inflated the sales prices for the properties and took out huge fees at closing from the loan proceeds. All of the homes ultimately fell into foreclosure, and some purchasers had their credit ruined.

Deputy Attorney General Noto presented the case to the state grand jury. The investigation was conducted and coordinated for the Division of Criminal Justice Financial & Computer Crimes Bureau by Detective Kimberly Allen, Deputy Attorney General Noto, and Supervising Deputy Attorney General Terrence Hull, Chief of the Financial & Computer Crimes Bureau.

Attorney General Chiesa and Director Taylor noted that the Division of Criminal Justice has established a toll-free tipline 1-866-TIPS-4CJ for the public to report corruption, financial fraud and other illegal activities. Additionally, the public can log on to the Division of Criminal Justice Web site at www.njdcj.org to report suspected wrongdoing. All information received through the Division of Criminal Justice tipline or Web page will remain confidential.

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