A New Jersey mortgage broker admitted yesterday to submitting fraudulent documents and loan applications to multiple banks in order obtain home equity lines of credit, resulting in losses of $1.3 million, U.S. Attorney Paul J. Fishman announced.
According to court docuemnts, Sung Ho Mo, a/k/a “Douglas Mo,” 53, of Totowa, New Jersey, pleaded to the charge of conspiracy to commit bank fraud.
The defendant operated the fraud through his New Jersey mortgage brokerage business, Douglas Mo Mortgage, from 2005 through January 2014. Mo conspired with others, including a tax preparer, to fraudulently obtain the home loans.
Mo developed the scam by using his primary and secondary residences as collateral for the loans to fraudulently obtain multiple home equity lines of credit from several banks. To fool the lenders, he used a method that he called “shotgun loans,” in which he applied for several loans with multiple banks at the same time. This caused the banks to not know about the other loans on the properties.
Mo also used false documents from a tax preparer such as W-2 forms, federal income tax returns, and paystubs to support his fraudulent loan applications. After the loans were approved, he used the cash for his own personal expenses, and then defaulted on the mortgages. In addition, Mo used the same method with some of his clients.
He is scheduled for sentencing on June 13, 2016. Mo faces a maximum potential penalty of 30 years in prison, a $1 million fine, and will be ordered to pay restitution.