Passaic County, New Jersey, Man Admits Role In $1.3 Million ‘Shotgun’ Loan Scheme
NEWARK, N.J. – A self-employed loan broker today admitted using bogus documents and simultaneous applications at multiple banks to fraudulently obtain home equity lines of credit, resulting in losses of $1.3 million, U.S. Attorney Paul J. Fishman announced.
Sung Ho Mo, a/k/a “Douglas Mo,” 53, of Totowa, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with conspiracy to commit bank fraud. He was previously arrested on Aug. 4, 2015 and released on bail.
According to documents filed in this case and statements made in court:
Mo was the primary owner and operator of “Douglas Mo Mortgage,” a mortgage brokerage business in New Jersey. From 2005 through January 2014, Mo conspired with others, including a tax preparer, to fraudulently obtain home equity lines of credit and first mortgages.
As part of the scheme, Mo fraudulently obtained multiple home equity lines of credit from multiple banks, using his primary and secondary residences in Totowa as collateral for the loans. To trick the banks into issuing the lines of credit, Mo first engaged in a practice that he described as “shotgun loans,” in which he applied for several home equity lines of credit with multiple banks at the same time. By engaging in this practice, Mo thwarted the banks’ efforts to learn of security interests held by other banks on his homes.
Second, Mo falsely inflated his income by paying a tax preparer to produce false documents, including bogus W-2 forms, federal income tax returns and paystubs. Mo then submitted the fraudulent documents to the banks in support of his loan applications. After receiving home equity lines of credit, Mo used the proceeds for his own benefit and then defaulted on the loans. In addition, Mo obtained first mortgages for his clients using the same fraudulent scheme.
At sentencing, Mo faces a maximum potential penalty of 30 years in prison, a $1 million fine, and will be ordered to pay restitution. Sentencing is scheduled for June 13, 2016.
U.S. Attorney Fishman praised agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi in Newark, for the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Assistant Federal Public Defender Kevin F. Carlucci Esq., Newark