FOR IMMEDIATE RELEASE
May 12, 2011
CAMDEN, N.J. – A New Jersey man admitted today to devising a mortgage fraud scheme causing lenders to release more than $1.2 million based on fraudulent mortgage loan applications, U.S. Attorney Paul J. Fishman announced.
John Fabey, 47, of Cinnaminson, N.J., pleaded guilty to an Information charging him with wire fraud. He entered his guilty plea before U.S. District Judge Noel L. Hillman in Camden federal court.
According to documents filed in this case and statements made during Fabey’s guilty plea proceeding:
Fabey recruited a “straw buyer” to purchase numerous properties in New Jersey, including condominiums in coastal areas such as North Wildwood and Wildwood, as well as single family residences throughout other parts of New Jersey. The straw buyer was an unsophisticated individual whom Fabey knew lacked financial resources to qualify for mortgage loans to purchase the properties. Fabey induced the straw buyer to purchase the properties by claiming that the properties would be good investments for the straw buyer and by promising that in exchange for purchasing them, the straw buyer would neither pay deposits or closing costs to acquire the properties, nor incur any personal expense for monthly mortgage payments after the straw buyer owned the properties.
Fabey caused fraudulent mortgage loan applications in the name of the straw buyer and supporting documents to be submitted to mortgage lenders. The mortgage loan applications were false in that they attributed to the straw buyer inflated income and assets in order to induce the mortgage lenders to approve the loans. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Fabey took the proceeds from the fraudulent mortgage loans by having funds wired into various accounts that he controlled. Fabey caused the mortgage lenders to release more than $1.2 million based on fraudulent mortgage loan applications.
The charge to which Fabey pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for August 26, 2011.
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, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney R. Stephen Stigall of the United States Attorney’s Office Criminal Division in Camden.
Defense Counsel: Rocco C. Cipparone, Jr., Haddon Heights, N.J.