NJ AG Bags Pair In Alleged Short Sale, Straw Buyer Flipping Scam Using Phony I.D.s That Scored $100-300K Per Deal

From the Office of the New Jersey Attorney General:

• Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor [] announced that a Union County mortgage loan solicitor has been charged with conspiring with others – including a Kearny woman who was charged previously – in a scheme to steal millions of dollars by obtaining mortgage loans using false identities and counterfeit documents.

• According to Director Taylor, Nuno J. Sousa, 34, of Elizabeth, was arrested [] (Aug. 11) by detectives of the Division of Criminal Justice Major Crimes Bureau as a result of an ongoing investigation into the conspiracy. The Elizabeth Police assisted in the arrest. He was charged by complaint with first-degree conspiracy, first-degree money laundering, second-degree securities fraud and second-degree theft by deception. He is being held in jail with bail set at $200,000.

• Sousa is charged in connection with an alleged conspiracy that also included Genilza R. Nunes, 36, of Kearny, who was arrested by the Division of Criminal Justice on March 9. She was charged by complaint with the same offenses. Those charges are pending, and she is being held in jail with bail set at $2 million.(1)

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• Nunes, Sousa and their co-conspirators allegedly defrauded numerous lending institutions of millions of dollars through what is known as a “short sale mortgage loan property flip scheme.” [...] 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, Sousa and their co-conspirators obtained $100,000 to $300,000 per transaction.

• The fraudulent enterprise allegedly included other licensed and unlicensed professionals, including real estate agents, mortgage loan brokers, real estate appraisers, notaries, lawyers, straw buyers and counterfeit document makers.

For the NJ AG press release, see Union County Mortgage Broker Charged in Multi-Million Dollar Scheme to Obtain Loans Using Fake Identities & Documents.

(1) According to the press release, the state has specifically alleged that Nunes and Sousa – with Sousa acting as the mortgage loan solicitor – 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.