Isaac DePaula, Mortgage Fraud, New Jersey 2016

Long-Time Fugitive Arrested for Mortgage Fraud in New Jersey

NEWARK, N.J. – Isaac DePaula, a 40-year-old Brazilian national, has been arrested and charged with his role in a long-running mortgage fraud scheme based in New Jersey, announced U.S. Attorney Craig Carpenito.

DePaula, who was previously charged by complaint in 2012 and indicted in 2016, returned to the United States via Newark Liberty International Airport this morning to face a four-count indictment charging him with conspiracy to commit bank fraud and three counts of bank fraud.

According to documents filed in this and other cases and statements made in court, DePaula and his conspirators engaged in a large-scale mortgage fraud conspiracy through a company called Premier Mortgage Services (PMS) from September 2006 to May 2008. The conspirators targeted properties in low-income areas of New Jersey and used a variety of fraudulent documents to make it appear as though straw buyers possessed far more assets and earned far more income than they actually did.

The conspirators then submitted these fraudulent documents as part of mortgage loan applications to financial institutions, which relied on these documents to provide mortgage loans for the targeted properties. The conspirators split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (HUD-1), which hid the true sources and destinations of the mortgage funds.

DePaula, a loan officer at PMS, recruited straw buyers, provided false and fraudulent documents to the straw buyers, and incorporated false and fraudulent documents into loan applications to induce financial institutions to fund mortgage loans. He faces a maximum potential penalty of 30 years in prison and a fine of $1 million per count.

His co-defendant, Rodrigo Costa, remains at large, while all of the remaining conspirators have previously pleaded guilty and been sentenced for their roles in the scheme. U.S. Attorney Carpenito credited special agents of the FBI, IRS, and Federal Housing Finance Agency’s Office of the Inspector General for the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Zach Intrater. DePaula made his initial appearance before U.S. Magistrate Judge James B. Clark III in Newark federal court and was released on his own recognizance.

The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. DePaula is represented by Joshua Cohn Esq. of Saddle Brook, New Jersey.

Related Federal Cases