NJ Developer, Attorney Plead Guilty In $3.5M Mortgage Fraud Scheme

WATCHUNG, NJ – A New Jersey real estate developer and attorney both admitted Wednesday to conspiring to pull off a mortgage fraud scheme that resulted in over $3.5 million in losses, federal officials said.

Victor Santos, aka Vitor Santos, 63, of Watchung, and Fausto Simoes, 69, of Millington, each pleaded guilty via videoconference to count one of an indictment charging them with conspiracy to commit bank fraud before U.S. District Judge Michael A. Shipp in Trenton federal court, U.S. Attorney Philip R. Sellinger said.

Santos, a real estate developer, and Simoes, an attorney, conspired with others to fraudulently obtain mortgage loans with a total value of more than $4 million between September 2007 and November 2008, according to documents filed in this case and statements made in court.

Santos reportedly recruited fake buyers to purchase 12 properties in Newark, paying each “straw” buyer at least $5,000, Sellinger said. Using the identity and credit of these straw buyers allowed Santos, Simoes, and their conspirators to hide their identities as the actual purchasers of the properties from the lender.

After the properties were acquired, Santos and his conspirators would abandon their promises to pay the mortgages, Sellinger said, leaving the straw buyers responsible for the payments.
Without enough money from the straw buyers to pay the fraudulently obtained mortgages, the lender and insurers lost more than $3.5 million in the scheme, Sellinger added.

The pair face up to 30 years in prison and a fine of $1 million each.

Sentencing for Santos is scheduled for April 12, 2023. Simoes is slated to be sentenced on April 13, 2023.

Two other members of the scheme previously pleaded guilty and are currently awaiting sentencing.

U.S. Attorney Sellinger thanked Federal Housing Finance Agency special agents under the direction of Special Agent in Charge Robert Manchak, as well as special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation.