NEWARK, NJ—A West Orange, NJ ., man who owned and operated multiple foreclosure rescue companies admitted today to his role in a mortgage fraud scheme that defrauded numerous mortgage lenders of over $10 million, United States Attorney Paul J Fishman announced. Ronald Harris Jr, 41, of Piscataway, NJ ., pleaded guilty before United States Magistrate Judge Patty Shwartz to an information charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. Judge Shwartz recommended to United States District Judge Faith S Hochberg that his plea of guilty be accepted and entered. According to documents filed in this case and statements made during Harris’ guilty plea proceeding: Harris owned and operated Harris Capital and Skyline Capital Group, both of which held themselves out as foreclosure rescue companies and operated out of offices in Newark and later, Maplewood, NJ.

Harris admitted that he and other individuals, including Harris Capital employee Sterling Bruce, 37, of Newark, fraudulently promised to help homeowners avoid foreclosure, keep their homes, and repair their damaged credit by directing the homeowners to allow title to their homes to be put in the names of third party purchasers, or straw buyers, for approximately six month to one year. Harris told the homeowners that during that time period, he and others would help them obtain more favorable mortgages and improve their credit ratings. The homeowners were told that the titles to their homes would be returned to them. After the homeowners were signed up, Harris, Bruce, and others recruited individuals with good credit scores to act as straw buyers of the distressed properties.

The straw buyers were told that they were helping someone save his or her home and that they would make money when they sold the property back to the current owner after approximately one year. Once the distressed homeowners and straw buyers were in place, Harris, Bruce, Pia Perkinson, 39, of Parlin, NJ.—a mortgage loan officer at a number of different mortgage loan companies—and others caused loan applications to be sent in the straw buyers’ names to mortgage lenders. To increase the credit-worthiness of the straw buyers and to ensure that they would be approved for the loans, Harris, Bruce, Perkinson, and others submitted loan applications containing material false personal and financial information about the straw buyers, such as misstating their employment, income, and assets. For example, many of the straw buyers’ loan applications falsely stated that they worked for one of Harris’ companies making a substantial salary.

Harris would also regularly submit fraudulent supporting documents with the loan applications to support the false statements, such as fake employment records and fake investment account statements. Prior to the closings of these fraudulent transactions, Harris and Bruce regularly filed fraudulent liens for tens of thousands of dollars on the properties. At the closings of the transactions, the liens would be paid off with the proceeds of the fraudulently obtained loans and Harris and Bruce would enrich themselves. Harris admitted that he regularly laundered these loan proceeds through various bank accounts he controlled.

In total, Harris and his co-conspirators caused lenders to fund dozens of fraudulent loans that totaled more than $10 million. Of that amount, Harris received approximately $1,145,993. The wire fraud conspiracy count to which Harris pleaded guilty carries a maximum potential penalty of 30 years in prison and a fine of up to $1 million. The money laundering conspiracy count carries a maximum potential penalty of 20 years in prison and a fine of up to $250,000.

Sentencing is currently scheduled for September 13, 2011. Bruce previously pleaded guilty before Judge Shwartz to one count of wire fraud conspiracy relating to his role in the mortgage foreclosure rescue scheme. He is currently scheduled to be sentenced by Judge Hochberg on September 12, 2011. Perkinson also previously pleaded guilty before Judge Shwartz to one count of wire fraud conspiracy.

During her guilty plea, Perkinson admitted to submitting fraudulent loan applications to various lenders, as well as taking out at least two fraudulent loans herself. A sentencing date has not yet been determined. Sabir Muhammad, 47, of South Plainfield, NJ ., was charged along with Harris in the initial complaint, and the charges against him remain pending. United States Attorney Fishman credited postal inspectors of the United States Postal Inspection Service, under the direction of Inspector in Charge Thomas E Boyle; special agents of the FBI, under the direction of Special Agent in Charge Michael B Ward; and special agents of the IRS, under the direction of Special Agent in Charge Victor W Lessoff, with the investigation leading to today’s guilty plea.

The government is represented by Assistant United States Attorneys Matthew E Beck and Aaron Mendelsohn of the United States Attorney’s Office Economic Crimes Unit in Newark. The charges contained in the complaint against Muhammad are merely accusations, and the defendant is considered innocent unless and until proven guilty. 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: Alan D Bowman Esq ., Newark

Reported by: FBI

David B. Fein, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in New Haven has returned an indictment charging SYED A. BABAR, also known as “Ali,” 28, of Ledyard Street, New London, with one count of conspiracy to commit wire fraud and two counts of wire fraud. The charges stem from a mortgage fraud conspiracy that BABAR is alleged to have headed.

The indictment alleges that, between February 2007 and April 2010, BABAR, along with a mortgage broker, a real estate appraiser, two attorneys, and others, engaged in a scheme to obtain millions of dollars in residential real estate loans, including loans insured by the Federal Housing Administration, through the use of sham sales contracts, false loan applications and fraudulent property appraisals.

The indictment alleges that BABAR recruited and paid straw purchasers to nominally purchase homes. BABAR and his co-conspirators then directed the straw purchasers to enter into sales contracts with the sellers of homes for a price higher than the actual price that the seller would receive. Members of the conspiracy submitted false documentation in connection with loan applications that were submitted, including fraudulent appraisals of the properties being purchased in order to justify the inflated sales price and the loan amount being sought to fund each purchase. The indictment further alleges that BABAR and others created a fictitious construction company called “Sheda Telle Construction, LLC,” in order to divert fraud proceeds to it and, in some cases, to falsely justify the artificially inflated sales price of houses based on renovations purportedly made to the property that, in fact, did not occur. BABAR and his co-conspirators then split the fraud proceeds.

Contrary to the representations made on the loan applications, it is alleged that the straw purchasers never occupied the houses as their primary residences. They defaulted on the loans they obtained and let the houses go into foreclosure.

According to statements made in court, it is alleged that BABAR and his co-conspirators conducted this scheme on more than 25 properties in New London, New Haven, and other locations in Connecticut. As a result, it is alleged that various lenders suffered a loss of at least $2.5 million.

The indictment was returned on April 27, 2010, and unsealed today. BABAR was arrested on May 12. Today, United States Magistrate Judge Donna F. Martinez in Hartford ordered BABAR detained while the case is pending.

The charges of conspiracy to commit wire fraud and wire fraud carry a maximum term of imprisonment of 20 years on each count.

U.S. Attorney Fein stressed that an indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial at which it is the government’s burden to prove guilt beyond a reasonable doubt.

U.S. Attorney Fein stated that the investigation is ongoing.

This case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Eric J. Glover.

In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes, and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an e-mail to ctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.

To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.