08-09-05 -- Olewuenyi, Chris -- Guilty Plea -- News Release

Attorney Pleads Guilty in "Land Flipping" Conspiracy Involving Properties in Union, Essex

NEWARK - An attorney involved in a conspiracy to "flip" more than 40 properties in Essex and Union Counties pleaded guilty today to defrauding Michigan-based Flagstar Bank, U.S. Attorney Christopher J. Christie announced.

Chris Olewuenyi, 49, of South Orange, whose offices are located in Union, pleaded guilty before U.S. District Judge John C. Lifland to conspiracy to submit false statements to Flagstar. Olewuenyi faces a maximum term of five years in prison and a $250,000 fine when he is sentenced by Judge Lifland on Nov. 15.

Olewuenyi is the sixth person to plead guilty in the conspiracy.

Olewuenyi admitted that from approximately April 2004 through December 2004 he acted as the closing attorney on properties located by co-defendant Gilbert Hart, and that he conspired with Hart to submit documents containing false information to Flagstar, including a deed that falsely identified the seller of one property.

The Superseding Information to which Olewuenyi pleaded guilty alleged that Hart and Joyce Kirkland recruited unqualified "straw buyers" to nominally purchase distressed properties located by them in Newark, East Orange, Scotch Plains, and other communities. Further, the Superseding Information charged that Hart and Kirkland obtained loans for the straw buyers from Flagstar and other lenders by submitting false mortgage applications that inflated the straw purchasers' annual income and assets.

Hart and Kirkland also obtained appraisals on the properties that inflated the value of the properties above both the agreed upon sales price and the market price in order to extract more money from Flagstar and the other lenders at closing. To close the transactions, Hart and Kirkland paid closing attorneys, including Olewuenyi, to submit false documents to Flagstar, including deeds and settlement statements that contained false information, including false representations about disbursements made by Olewuenyi to the parties to the transactions.

Others pleading guilty to date are:

• George Priester, 23, formerly of Rockaway Township, a mortgage broker formerly employed by Basik Funding of Paterson, to conspiracy. Priester admitted that he submitted mortgage applications to Flagstar and other lenders containing false information about the prospective purchasers' income and assets.

• Hart and Kirkland, to their roles as ringleaders in the conspiracy.

• Ralph DeMayo, 34, of West Orange, to conspiring with Hart to defraud Flagstar Bank by submitting mortgage applications that falsely inflated DeMayo's income and assets. In addition, DeMayo also admitted that he recruited another individual to act as a "straw buyer" on a property that he purchased in Orange.

• Attorney C. Brian Daly, 60, of Holmdel, to conspiring with Hart and Kirkland to make false statements to Flagstar from December 2003 through March 2004. Daly admitted that he prepared settlement statements in connection with the closing of several properties that falsely stated the sales price of the properties, and the disbursements that he made to the parties to the transactions, including the fees that he paid to himself.

The investigation is continuing with respect to several additional participants in the scheme.

U.S. Attorney Christie credited Special Agents of the FBI, under the direction of Special Agent in Charge Leslie Wiser, Jr., in Newark, with the investigation of Olewuenyi and the co-conspirators.

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Defense Counsel: Henry Klingeman, Esq. Madison