Ex-NJ Politician Gets 10 Months House Arrest After Getting Nailed For Rent Skimming On 2-Family House; Admits Pocketing Nearly $150K In Rental Income While Stiffing Lender Out Of House Payments On $400K+ HUD-Related Mortgage

In West New York, New Jersey, The Jersey Journal reports:

• A former West New York commissioner will spend about a year on house arrest for collecting nearly $150,000 in rental income while being in default of a federal mortgage loan.
  
  Ruben Vargas pleaded guilty to equity skimming in May after obtaining a $417,449 loan through the Department of Housing and Urban Development to buy a two-family home at 5512 Grant Place. Vargas collected about $3,000 each month in rental income from the property without making any payment on the mortgage that he obtained in 2007, U.S. Attorney Paul J. Fishman announced.
  
  Vargas was sentenced [] to three years of probation with 10 months of location monitoring in Trenton. He was ordered to pay the federal government back the $149,900 he collected in rental income, but does not have to pay the interest on the loan.
  
  By law, anyone in default of a HUD loan can only use rental income for necessary expenses to the property and for making payments on the mortgage.
  
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  Vargas faced up to five years in prison and $500,000 in fines on the charge. Fines in the case were waived and he was only ordered to pay an additional $100 for assessment, according to the minutes of his sentencing.

For the story, see Former West New York commissioner sentenced in $400K HUD scam.