The owner of a New Jersey Title agency and one of her employees have pleaded guilty to felony money laundering charges for their roles in a mortgage fraud scheme.
Sheila Zullo, 46, of Green Brook, New Jersey, owner of Ideal Title Agency, LLC, admitted that she illegally distributed the loan funds as escrow agent, and pleaded guilty earlier this month to a charge of third-degree money laundering. She faces a recommended sentence of up to three years in prison and a $150,000 fine. Her employee, Maureen R. Stillwell, 50, of Somerville, admitted that she helped prepare false closing documents, and pleaded guilty to second-degree money laundering. She faces a sentence of up to seven years in prison and a $25,000 fine. They are scheduled to be sentenced on June 29th.
Four others have pleaded guilty to felony charges for their roles in the scheme, including the principal of a bogus real estate development company, her lawyer, her real estate agent, and a mortgage broker. The scheme involved defrauding a mortgage lender of $431,200 by filing a false loan application and purchasing a home in Newark in the name of a deceased man.
“Home sales typically involve various professionals, including real estate agents, attorneys, title agents and mortgage brokers, who are responsible for providing multiple layers of review and oversight to prevent fraud,” said New Jersey Attorney General Jeffrey S. Chiesa in a statement. “In this case, however, we had dishonest operators in every one of those roles, leading the unsuspecting lender to provide a $431,200 mortgage loan to a dead man.
According to prosecutors, Genilza R. Nunes, the mastermind of the scheme, acted as a principal of Leska Management, a bogus real estate management company. With the assistance of her real estate agent, Lillian Veras, Nunes arranged for the purchase of a home in Newark from a woman who had fallen behind in her mortgage payments. The seller owed $477,196 on her loan, but the holder of the mortgage, Kondaur Capital Corp., agreed to a short sale for $260,000 to a purported buyer identified by the defendants.
That sale was never completed. Nunes' lawyer, Paul DiGiacomo, told Kondaur the sale had fallen through. He then negotiated with Kondaur to assign the mortgage to Leska at a discounted price of $219,877. He never disclosed that, prior to assignment of the mortgage, the home was sold at an inflated price of $539,000 to a fictitious buyer created by the defendants. Nunes, with assistance from Nuno J. Sousa, a mortgage broker, fraudulently applied to Provident Funding Associates for a $431,200 mortgage loan and purchased the home using the identity of a deceased man whose last name was “Benazi.” Nunes created counterfeit bank records, employment records and false identification documents for Benazi for the loan application, and she had another man pose as Benazi at the closing. No payments were ever made to the lender on the loan. The seller was never notified of the closing, and her signature was forged on the closing documents.
Stillwell handled the closing for Ideal Title and assisted in the creation of false closing documents used to deceive the lender. She never collected monies due at closing from the buyer, and falsified HUD settlement statements to indicate that they had been collected and that the prior mortgage had been paid off. In her role as escrow agent, Zullo misappropriated loan proceeds by wiring $376,032 to DiGiacomo’s attorney trust account at Nunes’ direction. DiGiacomo used $219,877 of the misappropriated funds to pay for the assignment of the mortgage and wired the balance of $156,155, representing the net illegal profits, into a bank account controlled by Nunes and Veras. Stillwell, Zullo and DiGiacomo were all compensated for their participation in the scheme.