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New Jersey Real Estate Broker Sentenced to Prison for $3.5M Loan Scheme
A New York real estate broker has been sentenced to 21 months in prison for his role in a $3.5 million scheme to defraud banks in New Jersey and New York.
Michael Arroyo, 60, of Bronx, New York, was sentenced by U.S. District Judge John Michael Vazquez in Newark federal court to 21 months in prison and five years of supervised release for conspiracy to commit bank fraud.
Arroyo was accused of working with others to obtain multiple home equity lines of credit (HELOCs) from banks on residential properties in New Jersey and New York, including a property in the Bronx. The group would then apply for HELOCs in the name of a family friend, hiding the fact that the property was already subject to senior liens or that the same property was offered as collateral for a line of credit from another lender.
The scheme resulted in losses of over $3.5 million to the victim banks. Arroyo’s co-conspirator, Rafael Popoteur, 67, of Ridgefield Park, New Jersey, was sentenced to three years of supervised release, including one year of house arrest, for his role in the scheme.
Arroyo and his co-conspirators used a practice known as ‘shotgunning’ to apply for multiple HELOCs at the same time, hiding the true value of the properties and inflating the family friend’s income without their knowledge. The victim banks eventually issued loans in excess of $500,000, which were then disbursed to Arroyo and others.
U.S. Attorney Craig Carpenito announced the sentencing, stating that the scheme resulted in significant losses to the victim banks. The case was investigated by the FBI and the U.S. Attorney’s Office for the District of New Jersey.
Arroyo’s sentencing is a significant blow to the real estate industry, highlighting the need for stricter regulations and increased oversight to prevent such schemes in the future.
Grimy Times, a division of Grimy Media LLC. All Rights Reserved.
Key Facts
- State: New Jersey
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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