Tuesday, December 18, 2012

Newark Feds Tag Another With Sale Leaseback-Peddling Equity Stripping Racket As Guilty-Pleaded Son Awaits Sentencing For Role In Same Ripoff

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

  • An Ocean County, N.J., man was indicted [Thursday] for his alleged role in a phony foreclosure rescue scheme that was part of a $4.4 million mortgage fraud, U.S. Attorney Paul J. Fishman announced.

    Vito C. Grippo, 58, of Jackson, N.J., the president of Morgan Financial Equity Shares and Vanick Holdings LLC, was indicted by a federal grand jury on one count of conspiracy to commit wire fraud and three counts of filing a false tax return for the years 2006 through 2008.

    According to the Indictment:

    Between January 2008 and February 2010, Vito Grippo held Morgan Financial out to the public as a company that could help homeowners in financial distress who faced foreclosure on their homes through something Grippo called the “Equity Share Program.” As described by Grippo and his associates, the Equity Share Program involved creating a limited liability company (“LLC”) in the name of the homeowner’s house in which LLC the homeowner would supposedly own a 90 percent interest with the rest to be owned by one or two private investors.

    In reality, the so-called investors invested nothing and were instead straw buyers recruited by Vito Grippo or his son, Frederick “Freddie” Grippo because they had good credit. The Grippos and their associates then made out mortgage loan applications in the names of the “investors” for the purchase of the properties owned by the homeowners in distress. Freddie Grippo pleaded guilty before Judge McNulty on Nov. 28, 2012, to conspiracy to commit wire fraud.(1)

    A homeowner in distress would come to a closing in Vito Grippo’s office and be given a stack of documents to sign. The homeowners would be led to believe the documents would prevent foreclosure and frequently did not understand that they would be transferring title to their homes to the “investor.”

    The so-called investor was, in reality, a straw buyer of the homeowner’s house. The new mortgage loan applications filled out by the Grippos or their associates in the name of one of the investors contained materially false information about the loan applicant’s monthly income, his assets and whether the residence to be bought would be his primary residence.

    The new loan application would be submitted to Worldwide Financial Resources for processing, where Freddie Grippo, a loan officer at Worldwide, would see to it that the loan was approved. The loan money was wired to the settlement agent for a given transaction and Vito Grippo would direct the settlement agent to forward a portion of those loan proceeds to bank accounts that Vito Grippo controlled.

    Properties whose original owners fell victim to the Equity Share Program were found throughout the metropolitan area, including homes in Rutherford, N.J., Monroe, N.J. and Brooklyn, N.Y.(2)
For the U.S. Attorney Press release, see Ocean County, N.J., Man Indicted In Mortgage Fraud Scheme.

For the Indictment, see U.S v. Grippo.

(1) See Newark Feds Score Another Foreclosure Rescue Guilty Plea; Suspect Admits Role In Peddling Sale Leaseback Ripoffs To High Equity, No-Cash, Financially Distressed Homeowners.

Inasmuch as the younger Grippo has yet to be sentenced (March 6, 2013, according to this press release), I wonder if he has already sung to the Feds against his old man, throwing Dad under the bus to score a more lenient sentence for himself while allowing prosecutors to squeeze a guilty plea out of senior Grippo and quickly wrap this case up:
  • "When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed." United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring).

(2) Both father and son were also recently tagged by the Office of the New Jersey Attorney General on state charges relating to the allegedly illegal sale leaseback-peddling racket. See Theft By Deception/Failure To Make Required Disposition Of Property Received Among Charges Facing Pair Pinched By NJ AG In Alleged Sale Leaseback, Equity Stripping Foreclosure Rescue Peddling Racket.

No comments: