Essex County Man Sentenced for Role in Mortgage Fraud Scheme

An Essex County man was sentenced today for conspiring to defraud financial institutions and launder stolen funds as part of a $15 million mortgage fraud scam which used false documents to make illegal profits on overbuilt condos, according to the United States Attorney’s Office.

Timothy Ricks, 47, of East Orange, was sentenced to 84 months in prison after previously pleading guilty to one count of conspiracy to commit wire fraud and one county of conspiracy to commit money laundering, the U.S. Attorney’s Office said.

According to authorities, Ricks was one of 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. He and others located oceanfront condos overbuilt by developers and negotiated buyout prices with sellers. The group then caused the sales prices for the condos to be much higher than the buyout price, in order to ensure higher proceeds, the U.S. Attorney’s Office said.

The East Orange man and other defendants recruited straw buyers to purchase properties at inflated rates, authorities said. The buyers had good credit scores, but lacked money to qualify for mortgage loans, so Ricks and the other defendants created phony documents to make them look more creditworthy in order to get lenders to make the loans, the attorney’s office said.

Following this, the defendants caused fraudulent mortgage loan applications in the name of the straw buyers to be submitted to mortgage brokers that the brokers knew were false, the U.S. Attorney’s Office reported. After the brokers approved the loans and mortgage lenders issued loan proceeds, the defendants took a portion of the proceeds after having had funds wired or checks deposited into various accounts, authorities said.

Ricks will also be required to serve five years supervised release following his prison sentence.