B'klyn-Based Duo Who Ran Equity Stripping Ripoffs Get Multi-Year Prison Stays After Guilty Pleas; Pair Pinched For Peddling Predatory Sale Leasebacks

From the Office of the U.S. Attorney (Newark, New Jersey):

• Two Brooklyn, N.Y., men were sentenced [] for conspiring with each other and others in a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, U.S. Attorney Paul J. Fishman announced.



• Phil A. Simon, 35, and Garth Celestine, 46, were sentenced to 66 months and 36 months in prison, respectively. Both defendants previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to conspiracy to commit wire fraud. Judge Cavanaugh also imposed the sentence [] in Newark federal court.



• According to documents filed in this case and statements made in court:
  
  From 2004 to 2007, Simon and Celestine owned and operated Home Savers Consulting Corp., which held itself out as a foreclosure rescue company with two locations in New York. Simon and Celestine conspired with each other and others to defraud both homeowners facing foreclosure and mortgage lenders by making false statements and promises. Simon and Celestine defrauded more than 40 homeowners and mortgage lenders, causing losses to the victims of more than $3.3 million.
  
  Home Savers advertised to homeowners and promised to help them avoid foreclosure, keep their homes and repair their damaged credit. Simon and Celestine told the homeowners they could avoid foreclosure by signing contracts of sale and transferring title to their homes to individuals who would act as “straw buyers” of the properties.
  
  Simon and Celestine promised the homeowners that after they transferred their title to these straw buyers, Home Savers would help them improve their credit ratings, help them obtain more favorable mortgages on their homes, and ultimately direct the straw buyers to transfer the title to their homes back to the homeowners within six months to one year.
  
  Simon and Celestine typically told the homeowners the equity withdrawn from their properties would be kept in a separate account and used to pay the mortgages and expenses on their homes.
  
  After the homeowners were signed up, Simon and Celestine recruited individuals with good credit scores to act as straw buyers and paid them about $10,000 per property. Using the homeowners’ properties and the good credit ratings of the straw buyers, Simon and Celestine applied for mortgages in the names of the straw buyers to extract the maximum available equity from the homes.(1)

For the U.S. Attorney press release, see Co-Owners of Home Savers Consulting Corp. sentenced to prison for orchestrating mortgage foreclosure rescue scheme.

(1) For more on this type of foreclosure rescue ripoff, see:

• Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals;
• Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (June 2005).