YOU READ IT HERE FIRST : A Bergen County real estate investor was sentenced today to 50 months in federal prison and ordered to pay $1.6 million in connection with a mortgage fraud and property-flipping scheme.
Frederick Ugwu, 54, of Upper Saddle River, was convicted in December 2009 after a five-week jury trial of wire fraud, money laundering and conspiracy.
U.S. Attorney Paul J. Fishman said Ugwu conspired with several others to sell two- and three-family rental properties to borrowers whose mortgage loans were obtained by fraud. Ugwu acquired distressed rental properties in Paterson cheaply, made basic or minimal repairs to them, and then sold them for several times more than he paid for them just weeks or months earlier, Fishman said.
He said Ugwu signed documents before and at the closings falsely representing that the borrowers had paid him tens of thousands in down payments and at the closings — when they hadn’t.
“Ugwu also allowed hundreds of thousands of dollars in proceeds from some of the sales to go to his coconspirators while hiding many of those payments from the mortgage lenders,” the U.S. Attorney said.
In addition to the prison term and restitution order, U.S. District Judge Jose L. Linares sentenced Ugwu to three years of supervised release. On top of that, Ugwu is required to forfeit $1.75 million collected through the scheme — as well as whatever is in three different bank accounts that Fishman said he used to deposit his ill-gotten gains.
Ugwu’s case is part of an ongoing investigation by the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG), the FBI, the U.S. Postal Inspection Service and IRS-Criminal Investigation into fraudulent Federal Housing Administration-insured and conventional mortgage loans originated by various New Jersey mortgage companies.
The investigation has brought more than a dozen guilty pleas from current or former New Jersey residents, including:
*Michael Eliasof, a former Paramus, N.J., real estate agent;
*Gerald Carti, a former loan officer and shareholder of U.S. Mortgage Corp.;
*Amer Mir, a former loan officer of United Home Mortgage Co.;
*Norman Barna, who like Ugwu sold numerous Paterson properties through the scheme;
*William Ottaviano, an appraiser;
*Renford Davis and Hopeton Bradley (now deceased), who jointly managed many of the Paterson properties involved in the scheme;
*Claribel Morrobel, a recruiter for the scheme; and
*Melanie Gebbia, the former legal assistant of William Colacino (now deceased), a former Garfield attorney and municipal court judge.
Linares recently sentenced Corallo, Eliasof, Carti and Ottaviano to 51 months, 40 months, 27 months, 15 months and six months in prison, respectively, for their roles in the scheme, while Barna, Gebbia and Morrobel each received probation. Mir is scheduled to be sentenced April 20.
Fishman credited special agents of HUD-OIG; special agents of the FBI; inspectors from the U.S. Postal Inspection Service; and special agents of IRS-Criminal Investigation. Assistant U.S. Attorney Mark E. Coyne, Chief of the U.S. Attorney’s Office Appeals Division, and Assistant U.S. Attorney Matthew E. Beck of the U.S. Attorney’s Office Economic Crimes Unit in Newark handled the case.
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