Two Real Estate Brokers Plead Guilty To Defrauding Banks In $3.5 Million ‘Shotgun’ Loan Scheme
NEWARK, N.J. – Two New York men today admitted their roles in a $3.5 million scheme to use false information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning,” Acting U.S. Attorney William E. Fitzpatrick announced.
Simon Curanaj, 62, of Yonkers, New York, and Michael Arroyo, 59, of Bronx, New York, each pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to separate informations charging them with conspiracy to commit bank fraud.
According to documents filed in the case and statements made in court:
From 2012 through January 2014, Curanaj, Arroyo, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOCs) from banks on residential properties in New Jersey and New York, including a residential property on Havermeyer Avenue in the Bronx. In 2013, Curanaj, Arroyo, and others transferred ownership of the property to an individual living at the property and his family friend.
Curanaj, Arroyo, and others then applied, in the family friend’s name, for two HELOCs from two banks using the Havermeyer Avenue property as collateral. They hid from the lenders the fact that the property was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also falsely inflated the family friend’s income without his knowledge. In addition, the equity in the property was far less than the amount of the HELOC loans Curanaj, Arroyo, and others applied for.
The victim banks eventually issued loans to the family friend in excess of $500,000. After the victim banks deposited money into the family friend’s bank accounts, portions of the funds were disbursed to Curanaj, Arroyo, and others. Eventually, the family friend defaulted on the two HELOC loans.
The overall scheme resulted in $3.5 million in losses to the victim banks.
The conspiracy to commit bank fraud count carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. Sentencing for Curanaj and Arroyo is scheduled for Feb. 27, 2018.
Acting U.S. Attorney Fitzpatrick credited special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.
Curanaj: Anthony Iacullo Esq.
Arroyo: Telesforo Del Valle Esq.