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Henderson man sentenced to prison in $9M mortgage fraud scheme

A Henderson man was sentenced Thursday by a New Jersey judge to 18 months in prison for his role in a $9 million mortgage fraud scheme.

Joseph A. Gonzalez, 46, used bogus information and loan applications at multiple banks — known as “shot-gunning” — to attempt to obtain home equity lines of credit on properties he did not own, court records show.

Gonzalez previously pleaded guilty to one count of conspiracy to commit bank fraud and was sentenced Thursday before U.S. District Judge John Michael Vazquez via videoconference. He is the sixth person to plead guilty in connection with the crime.

From 2010 to 2018, Jorge Flores and Simon Curanaj, a real estate broker in the Bronx who also pleaded guilty and is awaiting sentencing, ran a mortgage fraud scheme, court records show. The two applied for more than $9 million in home equity lines of credit from banks on residential properties in New Jersey and New York.

Flores and Gonzalez used a property in Jersey City, New Jersey, as part of the scheme. The owner of the property allowed Gonzalez to live there in exchange for management services, but neither he nor Flores owned the property.

Gonzalez also recruited an individual with good credit to act as a straw buyer, according to court documents. Without the owner’s knowledge, he prepared a quitclaim deed — which contains no warranties of the title — and transferred the property to the straw buyer, records show.

A straw buyer is a person who makes a purchase on behalf of another person. The signatures on the deed were forged.

Gonzalez and Flores then applied for two home equity lines of credit from multiple banks using the Jersey City property as collateral in the straw buyer’s name. They concealed the fact that the property offered as collateral was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender.

The applications also contained false information concerning the straw buyer’s income, which was stated to be higher than his actual income, court records state.

At the time the applications were made, the value of the property was less than the amount of the home equity loans for which Gonzalez and Flores applied.

The victim banks eventually issued more than $500,000 in loans to the straw buyer. Almost all of the money was disbursed to Gonzalez, Flores, and others, records show. Gonzalez used $43,000 of the illicit proceeds to buy a luxury car. Both loans eventually defaulted.

In addition to imposing the prison term, Vazquez sentenced Gonzalez to three years of supervised release and ordered him to pay restitution of $512,500.

Contact Briana Erickson at berickson@reviewjournal.com or 702-387-5244. Follow @ByBrianaE on Twitter.

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