FOR IMMEDIATE RELEASE
March 15, 2011
NEWARK, N.J. – A Bloomfield, N.J., man was sentenced today to a year and a day in prison for his role in a mortgage fraud scheme carried out by the owner and employees of Elite Financial Solutions, a company based in Scotch Plains, N.J., which claimed to be a home foreclosure rescue company, U.S. Attorney Paul J. Fishman announced.
Michael Martino, 47, who as an employee of Elite was responsible for recruiting straw buyers for properties in foreclosure, previously pleaded guilty before U.S. District Judge William J. Martini to one count of wire fraud conspiracy. Judge Martini also imposed the sentence today in Newark federal court.
According to documents filed in this and related cases and statements made in court:
Beginning in February 2005, Elite’s owner and operator Stephen French devised a scheme to fraudulently induce financial institutions to provide mortgage loans to unqualified borrowers, enabling French, Martino, and their co-conspirators to earn consulting fees from the sales of properties financed by the fraudulently induced loans.
French, Martino, and others at Elite targeted New Jersey homeowners who couldn’t make mortgage payments and were facing foreclosure. They would promise the homeowners that Elite would help them keep their homes and repair their damaged credit. The homeowners would be instructed to permit title to their homes to be put in the names of straw buyers for one or two years. French promised to improve their credit ratings during that time, help them obtain more favorable mortgages, and ultimately return title to their homes.
French, Martino, and others at Elite told the homeowners that equity withdrawn from their homes would be kept in escrow and used to pay the mortgages and expenses and to repair their credit. Instead, Elite took a “consulting fee” of $25,000 per property, and the remaining equity was deposited into bank accounts French controlled.
Martino admitted that he recruited straw buyers for the scheme. French, Martino, and others at Elite paid the straw buyers $10,000 for use of their names and credit histories in the transactions, and submitted fraudulent loan applications to mortgage lenders in the straw buyers’ names in order to ensure the loans would be approved.
In addition to the prison term, Judge Martini sentenced Martino to three years of supervised release and ordered him to pay $275,000 in restitution.
French, 53, of Scotch Plains, N.J., previously pleaded guilty before Judge Martini to one count of wire fraud conspiracy, admitting he caused more than $1 million in losses through the scheme. He is currently scheduled to be sentenced on April 21, 2011.
Tameka Broadhurst, 27, of Plainfield, N.J., a secretary and loan processor at Elite, previously pleaded guilty before Judge Martini to one count of wire fraud conspiracy and was sentenced on November 4, 2010, to a day in prison followed by 18 months of supervised release. Martini also ordered Broadhurst to pay $355,000 in restitution. During her guilty plea, Broadhurst admitted that she recruited straw buyers for the scheme and submitted fraudulent loan applications to mortgage lenders in straw buyers’ names.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate
and prosecute financial crimes. The task force includes representatives from a broad range of
federal agencies, regulatory authorities, inspectors general, and state and local law enforcement
who, working together, bring to bear a powerful array of criminal and civil enforcement
resources. The task force is working to improve efforts across the federal executive branch, and
with state and local partners, to investigate and prosecute significant financial crimes, ensure just
and effective punishment for those who perpetrate financial crimes, combat discrimination in the
lending and financial markets, and recover proceeds for victims of financial crimes.
Defense counsel: Anthony Iacullo, Nutley, N.J.