Newark Lawyer Guilty Of Large Mortgage Fraud Scheme In NJ

NEWARK, NJ — A New Jersey attorney has admitted that he ran a “large-scale mortgage fraud scheme” that involved properties in Jersey City, Clifton, Union and elsewhere in the state. The scam caused millions of dollars in losses, federal prosecutors announced.

On Friday, Christopher Goodson, 45, of Newark, pleaded guilty in Newark federal court to conspiracy to commit bank fraud, the U.S. Attorney’s Office of New Jersey stated.

According to court documents and statements, from January 2011 through August 2017, Goodson, his co-defendant, Anthony Garvin, and other unnamed conspirators engaged in a short sale fraud conspiracy targeting various New Jersey properties with mortgages that were in default, prosecutors said.

Here’s how the scheme allegedly worked, prosecutors said:

“The conspirators arranged simultaneous fraudulent transactions on the same target property. In the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to accept the sale of the target property at a loss, usually to a buyer who was secretly a conspirator or an entity controlled by the conspiracy. In the second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using false loan applications, pay stubs, bank account statements and title reports provided by members of the conspiracy. As a result, the second transaction frequently closed for significantly more or even double the price of the first transaction.”

Prosecutors said that Goodson admitted that he, Garvin and "others" rigged the short sale process at each step to maximize the difference in price between the two transactions and keep the victim financial institutions from detecting the fraud.

“For instance, Goodson concealed the fact that he played multiple roles in the short sale transactions, including allegedly generating false pre-approval letters from a New Jersey corporation he owned that purported to be a short-term lending company operating out of California,” prosecutors stated.

These letters were used to deceive banks into believing that the purchaser – typically a conspirator or entity controlled by Goodson – had the credit necessary for the transaction. Goodson also negotiated the fraudulent short sales with the banks, generated phony deeds that backdated the closing date of the first transactions, and even served as the closing attorney during some of the short sales, prosecutors stated.

According to prosecutors, Garvin was a real estate agent and investor who allegedly coordinated fraudulent transactions as part of the scheme. The charge against him remains pending.

“The conspirators disbursed the funds into various accounts they controlled to conceal their illegal activities and split the profits,” prosecutors stated. “In total, the conspiracy defrauded financial institutions out of millions of dollars.”

Prosecutors said that the conspiracy to commit bank fraud count is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Jan. 29, 2019.

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