Lester Soto, Mortgage Fraud, New Jersey 2008

New Jersey Mortgage Fraud Scheme Unravels

NEWARK, N.J. – Lester Soto, 57, of Freehold, N.J., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with two counts of conspiracy to commit bank fraud.

Soto and others, including fake document creators, a complicit lawyer and paralegal, and numerous loan officers, engaged in two related mortgage fraud conspiracies through a company called Premier Mortgage Services (APMS) from September 2006 to May 2008. The schemes targeted properties in low-income areas of New Jersey.

Soto and his conspirators recruited ‘straw buyers,’ then used fraudulent documents to make it appear as though the straw buyers possessed far more assets and earned far more income than they actually did. They submitted these documents as part of mortgage loan applications to financial institutions, which provided mortgage loans for the subject properties.

The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings. Soto and his conspirators defrauded financial institutions out of more than $30 million.

As a part-owner of PMS, Soto also acted as a loan officer on certain PMS mortgage loan applications and took a percentage of PMS’ profits. He employed document makers to create false and fraudulent documents and put mortgage brokers at PMS in contact with these document makers to create other false and fraudulent documents.

Soto instructed PMS employees to provide him with loan files that PMS employees believed contained suspicious information, and then personally shepherded these loan files through to funding. The conspirators profited illegally by receiving a commission from PMS for each mortgage loan that they closed and also diverted portions of the fraudulently obtained mortgage proceeds for themselves, often via shell corporations or nominee bank accounts.

The guilty plea was announced by U.S. Attorney Paul J. Fishman. Lester Soto is scheduled to be sentenced on March 9, 2009. The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division.

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