Four People, Including Realtor and Attorney, Admit Mortgage Fraud

NEWARK – A former real estate broker, loan officer, closing attorney and Ecuadoran immigrant pleaded guilty today to their roles in a conspiracy to “flip” properties in Union County and defraud the U.S. Department of Housing and Urban Development of more than $300,000, U.S. Attorney Christopher J. Christie announced.

Mario Mendoza , 41, of Union, was formerly a real estate broker with Weichert Realtors in Union. Kenneth DiPrenda, 42, of East Hanover, was formerly a loan officer at AMS Mortgage in West Patterson. Attorney Linda Serrano, 44, of Union, is a private-practice attorney. Myrium Vaca, 45, of Elizabeth, is an Ecuadoran national and worked, at times, for Mendoza.

Mendoza, DiPrenda and Vaca, each pleaded guilty before U.S. District Judge Joel A. Pisano to separate one-count criminal Informations which alleged conspiracy to submit false statement to HUD. Serrano pleaded guilty to a one-count Information which alleged the submission of false statements to HUD.

According to the Informations, the conspirators fraudulently induced HUD to insure certain mortgage loans made to unqualified borrowers, enabling Mendoza, DiPrenda, Serrano, Vaca and their co-conspirators to earn hundred of thousands of dollars in profits from the sales of properties financed by the fraudulent loans.

According to the Informations to which the defendants pleaded guilty, HUD was defrauded by more than $300,000. The fraud took place between approximately December 1999 and July 2001

As part of the alleged conspiracy, the defendants and others solicited and recruited individuals who, with false identification, purchased homes in Union County and elsewhere. Many of the homes were being sold by Mendoza’s clients at Weichert. Those clients were unwittingly duped into selling their homes to unqualified borrowers who were using fake identification.

According to the Informations, DiPrenda, a loan officer, assisted in qualifying the borrowers for HUD-insured loans. Further, Mendoza, Vaca and others falsified documents for the borrowers’ loan files and then submitted the files to banks and, soon thereafter, HUD. The false documents included gift letters, credit explanation letters, W-2 form and employment records.

As part of the conspiracy, Mendoza often told sellers that their properties were being sold for a price that, unbeknownst to them, was far lower – often by tens of thousands of dollars – than the amount that was ultimately financed through the fraudulently secured HUD loans.

Serrano, as the closing agent, would complete two separate HUD-1 closing forms so that the seller would not know that the property was being sold for thousands more than the agreed upon price. One HUD-1 would show the decreased purchase price that would be given to the seller at the closing. The other HUD-1 would show the more accurate inflated price that would ultimately be forward to HUD.

According to the Informations, when the defendants did not sell the properties using two HUD-1s, they would assist unqualified borrowers, all of whom fraudulently used others identification, qualify for HUD-insured loans by fabricating documents on their behalf.

During their plea hearings, defendants Mendoza, DiPrenda and Vaca admitted to their roles in the conspiracy. Among other things, Mendoza admitted recruiting borrowers to use fake identifications to purchase properties he was selling for his clients at Weichert.

DiPrenda admitted falsifying documents, such as false credit explanation letters, in order to qualify unqualified borrowers for HUD-insured loans.

Vaca admitted to providing false gift letters, letters purporting to provide thousands of dollars to assist her relatives purchase homes, when in fact she neither provided the monies, nor was related to borrowers.

Serrano admitted preparing a materially false HUD-1 at Mendoza’s direction.

The defendants each face maximum penalties of five years in prison and a $250,000 fine. Pisano scheduled sentencings for June 28 and 29.

In determining an actual sentence, Judge Pisano will consult the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offenses, the defendants’ criminal histories, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence.

Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.

Christie credited Special Agents of the FBI, under the direction of Special Agent in Charge Leslie Wiser, Jr., Newark Division; and Special Agents of the HUD Office of Inspector General, under the direction of Ruth A. Ritzema, Special Agent in Charge, with bringing the case.

The Government is represented by Assistant U.S. Attorney Richard E. Constable, III of the U.S. Attorney's Office Special Prosecutions Division.