Closing Agent Admits Role in Large-Scale Mortgage Fraud Scheme

Allison Tussey —  August 9, 2013 — Leave a comment

Linda Cohen, 55, Orange, New Jersey, a paralegal, admitted participating in a long-running, large-scale mortgage fraud scheme that defrauded financial institutions of at least $2 million.

Cohen pleaded guilty before U.S. District Judge Esther Salas to an information charging her with one count of conspiring to commit bank fraud and one count of transacting in criminal proceeds.

According to documents filed in this case and statements made in court:

Cohen worked as a paralegal who handled real estate closing for S.B., an attorney licensed in New Jersey. Cohen acted as the settlement agent for fraudulent mortgage loans brokered by conspirator Klary Arcentales, 45, Lyndhurst, New Jersey, on behalf of Premier Mortgage Services. As closing agent, Cohen furthered the scheme by convening closings, receiving funds from lenders, and preparing HUD-1 reports that purported to reflect the sources and destinations of funds for mortgages on subject properties. Those HUD-1s were neither true nor accurate.

Cohen routinely certified HUD-1s in which she purported to have received a down payment from the buyer when no down payment had been made. At or following the closings, Cohen disbursed mortgage loan proceeds directly to Premier Mortgage Services, Arcentales, and other conspirators. Cohen created shell bank accounts into which she funneled the proceeds of her fraudulent activity.

The count of conspiracy to commit bank fraud to which Cohen pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine, and the count of transacting in criminal proceeds is punishable by a maximum penalty of 10 years in prison and a fine of $250,000 or twice the gross amount of any gain or loss. Sentencing is scheduled for November 18, 2013.

U.S. Attorney Paul J. Fishman announced the guilty plea.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to the guilty plea. He also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its role in the investigation.

The government is represented by Assistant U.S. Attorneys Zach Intrater and Rahul Agarwal of the Newark office.

Be Sociable, Share!

Allison Tussey

Posts Google+

No Comments

Be the first to start the conversation.

Leave a Reply

Text formatting is available via select HTML.

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong> 

*