NJ Feds Squeeze Guilty Plea From Brooklyn-Based Foreclosure Rescue Operator; Admits To Role In Peddling Sale Leaseback, Equity Stripping Scams

From the Office of the U.S. Attorney (Newark, New Jersey):

• A Brooklyn man pleaded guilty [] to conspiracy to commit wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, U.S. Attorney Paul J. Fishman announced. Garth Celestine, 44, of Brooklyn, New York – formerly an owner of Home Savers Consulting Corp., which was located in Brooklyn and Freeport, New York – pleaded guilty [] to the conspiracy charge before U.S. District Judge Dennis M. Cavanaugh.

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• On August 5, 2009, Celestine was arrested pursuant to a Complaint along with former Home Savers co-owner Phil A. Simon. According to the Information to which Celestine pleaded guilty, other documents filed in this case, and statements made during Celestine’s guilty plea proceeding:

• Celestine and Simon owned and operated Home Savers, which held itself out as a foreclosure rescue company, at 946 Fulton Street, Brooklyn, New York, and 350 North Main Street, Freeport, New York. Celestine and Simon allegedly conspired with each other and others to defraud both homeowners facing foreclosure and mortgage lenders by making materially false representations and promises.(1)

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• Celestine admitted that as a result of their actions, he and Simon fraudulently obtained more than $1 million and caused the mortgage lenders to fund dozens of fraudulent loans worth more than $10 million.

Reportedly, Simon has pleaded not guilty, and a criminal complaint against him is still pending, said Rebekah Carmichael, a spokeswoman for the U.S. Attorney’s Office. An investigation into the scheme continues, Carmichael reportedly said.

U.S. Attorney Fishman credited Federal investigators with the FBI, and Postal Inspectors of the U.S. Postal Inspection Service for their investigation leading to the guilty plea, and thanked Brooklyn District Attorney Charles J. Hynes for the assistance and cooperation that was provided by his Office.

For the U.S. Attorney press release, see Former Owner of Home Savers Consulting Corp. Pleads Guilty to Mortgage Foreclose Rescue Scheme.

See also, The Record: Brooklyn man pleads guilty to foreclosure scam in Bergenfield, Paterson.

Go here for earlier posts on the now-defunct New York City-area foreclosure rescue operator, Home Savers Consulting Corp.

(1) According to the press release, Celestine admitted that, doing business as Home Savers, he and his partner Simon advertised to homeowners and promised to help them avoid foreclosure, keep their homes, and repair their damaged credit. Celestine told the homeowners that they could avoid foreclosure by signing contracts of sale and transferring title to their homes to individuals who would act as “straw buyers” of the properties. Celestine promised the homeowners that after they transferred their title to these straw buyers, Home Savers would improve their credit ratings, help them obtain more favorable mortgages on their homes, and ultimately direct the straw buyers to transfer the title to their homes back to the homeowners within six months to one year. Celestine and Simon typically told the homeowners that the equity withdrawn from their properties would be kept in a separate account and used to pay the mortgages and expenses on their homes.