Cinnaminson Man's Guilty Plea Could Bring $1M Fine, Imprisonment

A Cinnaminson man admitted guilt Thursday in a mortgage fraud scheme that could bring a 30-year prison sentence and $1 million in fines.

John Fabey, 47, pleaded guilty to wire fraud before U.S. District Judge Noel L. Hillman in a Camden federal court. He entered the plea before a federal grand jury heard his case.

(Click on the PDF, right, to read the complaint against Fabey.)

Fabey admitted to the court that he devised a mortgage scheme that had lenders approving more than $1.2 million in fraudulent mortgage loan applications. The crimes occurred beginning in 2006 to October 2007.

According to U.S. Attorney Paul J. Fishman, Fabey created a “straw buyer” plan. He used an unsophisticated person—knowing that the buyer couldn’t afford real estate purchases—as bait to purchase numerous properties in New Jersey, according to Fishman.

Fabey reeled in the straw buyer with the allure of investment properties and the promise that the buyer would not be responsible for deposits, closing costs or mortgage payments. Fabey further promised to maintain the properties, locate tenants and collect rent, according to court documents.

The Cinnaminson man created falsified mortgage loan applications for the straw buyer that inflated the buyer’s income and assets as a ploy for loan approval, Fishman said. Many of these loans were based on overblown sales prices, which Fabey arranged with a co-conspirator, Fishman said. All told, Fabey racked up more than $1.2 million in fraudulent mortgage loans.

Fabey wired proceeds from the loans into his own accounts.

The wire fraud charge carries a possible 30-year prison sentence, in addition to a possible $1 million in fines. Fabey will learn his fate at an Aug. 26 sentencing.