Michael Meehan, 47, Bellmar, New Jersey, pleaded guilty to a one-count Information which charges him with conspiracy to commit wire fraud for creating and submitting to various mortgage lenders materially false and misleading property appraisals in the names of nominee buyers.
Meehan is the fourth defendant associated with N.J. Affordable Homes, Inc. (NJAH) to plead guilty in connection with the mortgage fraud scheme. NJAH, Perth Amboy, New Jersey, purported to be in the real estate financing and investment business. The company first came under scrutiny of the U.S. Securities and Exchange Commission, which obtained a restraining order against the company in September 2005. NJAH subsequently was ordered into receivership and then bankruptcy by a federal judge.
At his plea hearing, Meehan admitted that from March 2003 through September 2005, at the direction of NJAH’s appraisal coordinator, he participated in a conspiracy to defraud various mortgage lenders by submitting materially false and misleading property appraisals. The appraisals materially overstated the value of the properties and falsely claimed that the properties had substantial improvements, such as new windows, bathrooms, siding and plumbing and electric systems, Meehan admitted.
In many cases, Meehan did not even visit the properties in question, he admitted. For example, in one appraisal Meehan stated the property had numerous improvements, which included two new bathrooms, a new kitchen and new exterior doors, windows, decking, and stairs. Meehan admitted that the property in fact was and remains vacant land.
In January 2007, Meehan’s co-conspirator Katrina Arrington, 34, Hillsdale, New Jersey, pleaded guilty to her role in the conspiracy. In October 2006, co-conspirators John Kurzel, 55, New Brunswick, New Jersey, and Lucesita Santiago, 37, Woodbridge, New Jersey, also pleaded guilty to the same conspiracy charge to which Meehan pleaded guilty. Arrington, Kurzel and Santiago each admitted that total losses to mortgage lenders exceeded $7 million. Those defendants await sentencing.
The charges to which Meehan and his co-defendants pleaded guilty carry a statutory maximum penalty of five years in federal prison and a fine of $250,000, or twice the aggregate loss to any victim or aggregate gain to the defendants.
Rachel Dollar, the editor of Mortgage Fraud Blog is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors.