Newark Feds Charge Trio In Alleged Sale Leaseback, Equity Stripping Foreclosure Rescue Ripoff

In Newark, New Jersey, CBS 3 reports:

• Three people who offered distressed homeowners foreclosure rescue services have been arrested and charged with conspiracy to commit wire fraud, the U.S. Attorney's Office in New Jersey said Tuesday.

• Authorities say 40-year-old Ronald Harris Jr. of West Orange, 36-year-old Sterling Bruce of Old Bridge and 46-year-old Sabir Muhammad of South Plainfield conspired to defraud numerous mortgage lenders of over $10 million in fraudulently obtained loans.

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• Court papers say the men targeted homeowners facing foreclosure, promising to help them improve their credit scores, straighten out their finances and get their homes back if they agreed to transfer the titles temporarily to a third party. The defendants allegedly used the properties to fraudulently obtain loans. Using two companies owned by Harris, Harris Capital and Skyline Capital group, as well as a group of shell companies, the three allegedly recruited distressed home owners and "straw buyers" with good credit scores to be listed as the property owners. The defendants then used the straw buyers financial information to fraudulently apply for mortgages and other loans, according to court documents.

• Authorities said the straw buyers were allegedly promised that they would not only be helping out distressed homeowners, but would make money from interim renters and from the eventual resale of the properties back to their original owners. Authorities said most of the loans went into default.

According to the U.S. Attorney's Office in Newark, the trio allegedly defrauded numerous mortgage lenders of over $10 million, making $1.5 million for themselves.

For the story, see 3 Charged With Mortgage Fraud In New Jersey.

For the U.S. Attorney (Newark) press release, see Three Arrested And Charged In Foreclosure Rescue Scheme.

For the criminal complaint detailing the formal charges, see U.S. v. Harris, et al.