(Source: Richard Degener The Press of Atlantic City, Pleasantville, N.J. (MCT) — Eric Maratea, 27, a house painter from Philadelphia who earns approximately $250 a week, on June 20, 2007 purchased a condominium unit at 2401 Surf Avenue in North Wildwood for $617,000.
On July 31, 2007 Maratea purchased another unit, this one at 337 East 20th Avenue in North Wildwood, for $718,900.
How does a man with a low-paying job, without the income or assets necessary to own a second home at the shore, purchase two of them within a matter of weeks?
The answer, according to the U.S. Attorney’s Office, is not legally. Maratea is one of dozens of what authorities call “straw purchasers” involved with mortgage fraud in the Wildwoods.
The U.S. Attorney’s Office in New Jersey arrested 11 people last week, including an attorney and a real estate agent in Cape May County, in a case that authorities allege cost lenders $15 million. The U.S. Attorney’s Office in New Jersey on Monday said it is still conducting that investigation and more charges are possible.
Maratea’s case, however, was not related to last week’s arrests. It was prosecuted by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, an office dealing with several mortgage fraud cases in the Wildwoods because the people who masterminded the schemes live in their district.
Maratea, who pleaded guilty and awaits sentencing on Oct. 9, was what authorities call a straw purchaser. The mastermind, they say, was John C. Lucidi Jr. a Pennsylvania mortgage broker who worked at several firms, in West Chester and Newtown Square, and who engineered a scheme to defraud lenders of $7 million.
Court documents filed in U.S. District Court in Pennsylvania say Lucidi, who pleaded guilty and awaits sentencing Sept. 18, found buyers to purchase condominium units in North Wildwood at inflated prices by offering them “kickbacks” ranging from $30,000 to $50,000 per unit.
He helped the buyers qualify for the mortgages using false information including inflated income and asset information, false employment information and under-reported debt. Lucidi also created false documents such as W-2s and used bogus down payment checks. The buyers had good credit even if they were in low-paying jobs or in some cases unemployed. Lucidi completed the loan applications and did all sales price negotiations with the sellers, leaving himself a tidy profit from the difference between what the sellers received and the banks loaned.
Authorities say Lucidi told the buyers to use their share of the profits to pay the mortgage until they could resell at a profit or rent the units. But the real estate market crashed in 2008 and mortgage payments were not made. Banks took back the units and sold them at a fraction of the unpaid balance on the loans.
Authorities say Lucidi was behind 35 such transactions, most of them in North Wildwood but a few in Pennsylvania. The list of those defrauded include: Bank of America, CitiMortgage, Countrywide Bank, First Magnus Financial, JP Morgan Chase, PNC Bank and Wells Fargo. Authorities said the scheme began in May 2005 and ended in October 2008. Lucidi was charged with conspiracy, wire fraud and money laundering.
The U.S. Attorney’s Office has also charged numerous purchasers of the properties, though some are listed on court documents merely by their initials and have not been charged yet. Maratea was charged with conspiracy, wire fraud, engaging in monetary transactions in property derived from unlawful activity, and aiding and abetting. Authorities say the two North Wildwood properties he purchased cost CitiMortgage and other lenders $686,740. His take was $60,000, authorities allege.
Eric Itzi, 30, of Philadelphia, has pleaded guilty to charges that he purchased two North Wildwood properties with Lucidi. His sentencing is set for Sept. 19. Others charged include: Timothy Cook, 28, of Media, Pa.; Richard VonMinden, 33 of Las Vegas; Michael Smith, 32; and James Esposito, 41.
The case also led to charges against Gerald Cathie, a loan broker from Sicklerville, Camden County, charged with bank fraud, conspiracy, bribery of a bank employee and failure to file tax returns. Authorities allege Cathie assisted borrowers in securing lines of credit by providing false information on loan applications, leading to losses of $3.2 million.
“Defendant Gerald Cathie and John C. Lucidi Jr. knew that all of the mortgage loans for these individuals were obtained under false pretenses, in that the supporting documentation, such as tax returns, were fabricated,” according to documents filed in U.S. District Court in Pennsylvania.
Authorities say Cathie falsified nine lines of credit and six mortgage applications, charging the borrowers 5 percent to 7 percent of the loan amount and getting cash payments from Lucidi. Court papers allege Cathie “corruptly gave thousands of dollars in cash payments” to a bank employee to facilitate the deals and failed to file federal income tax returns.
The U.S. Attorney’s Office District of New Jersey has also been busy. Last week 11 were arrested for a mortgage fraud scheme based in the Wildwoods that authorities said involved condominium units at Bahama Breezes and The Dunes Condominiums in Wildwood Crest as well as the Erin Shores and Surf Avenue complexes in North Wildwood. The arrests included Wildwood Crest attorney Seth A. Fuscellaro and Angela L. Celli, formerly a real estate agent with Century 21 Alliance in North Wildwood who left the firm several years ago.
Federal authorities in New Jersey are also prosecuting five men in a $40.8 million mortgage fraud scam that included properties in Georgia, South Carolina and New Jersey. Condominium projects listed in court papers included the Vista Mar, Silver Dollar, Ebb Tide, and Stockton Beach House, all in Wildwood Crest, along with individual properties in several other New Jersey towns including Galloway Township, Phillipsburg, Orange, Elizabeth, Irvington and Flemington.
U.S. Attorney Paul J. Fishman said lenders lost $18 million. Highlights of this case include:
William Brown, 60, of Newark, Charles Harvath, 33, of Lodi, and Stephen F. Corba, 34, of Jersey City, pleaded guilty to conspiracy to commit wire fraud and money laundering.
John Siuszko, 56, of Wharton, and Michael Williams, 34, of Jersey City, pleaded guilty to conspiracy to commit wire fraud. Authorities say Siuszko and Williams were the straw purchasers.
©2012 The Press of Atlantic City (Pleasantville, N.J.)
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