Michael R. Senick, 63, Old Tappan, New Jersey, a Bergen County lawyer, admitted to participating in a mortgage fraud scheme that caused lenders to release approximately $400,000 based on fraudulent mortgage loan applications.

The defendant pleaded guilty to an Information charging him with bank fraud. He entered his guilty plea before U.S. District Judge Jerome B. Simandle in Camden, New Jersey, federal court.

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

Between January 2004 and January 2006, Senick's accomplice located real estate properties to purchase and recruited straw buyers to purchase them. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. Senick's accomplices caused fraudulent mortgage loan applications in the name of the straw buyers and supporting documents to be submitted to mortgage lenders. The mortgage loan applications attributed to the straw buyers contained inflated income and assets in order to induce the mortgage lenders to approve the loans.

Senick, who served as the closing attorney, caused fraudulent documents to be prepared, including HUD-1 Settlement Statements, that were supposed to accurately reflect the amount of money due from the straw purchasers to be paid to the sellers to close the sales of the properties. Prior to and during the closings, Senick caused the HUD-1 Settlement Statements, settlement disbursement sheets, and other documents to be manipulated, to show that the straw purchasers brought their own funds to the closings when, in fact, the straw purchasers had not.

Senick submitted the false HUD-1 Settlement Statements to the lenders, some of which were insured by the Federal Housing Administration. Senick also provided sales proceeds from the closings on the properties to his accomplice even though the accomplice was neither a buyer nor seller of the properties.

The bank fraud charge to which Senick pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing before Judge Simandle is currently scheduled for May 18, 2012.

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

U.S. Attorney Fishman credited special agents from the FBI's Atlantic City Resident Agency, under the direction of Special Agent in Charge Michael B. Ward in Newark; and special agents from the HUD-Office of Inspector General in Philadelphia, under the direction of Special Agent in Charge Joseph Clarke, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney R. Stephen Stigall of the U.S. Attorney's Office Criminal Division in Camden.

Defense counsel: Salvatore T. Alfano Esq., Bloomfield, N.J.