Suffolk Woman Charged in Subprime Mortgage Scam
Garden City Loan Officer Used Co-Conspirators, Phony Documents to Rip Off Lenders and Send Homes Into Foreclosure
May 22, 2009
MINEOLA, NY – Nassau County District Attorney Kathleen Rice announced today that a former loan officer at a Garden City mortgage broker has been arrested on grand larceny and forgery charges after she allegedly approved at least three loan applications from co-conspirators that she knew were based on falsified bank and employment information. In addition to falsifying the co-conspirators’ salary information, the loan applications included forged appraisals that inflated the cost of the loans and allowed her and her co-conspirators to pocket thousands of dollars in profit.
Anita Bareja, 35, of Dix Hills, was arrested Thursday by District Attorney Investigators and charged with two counts of Grand Larceny in the Second Degree, three counts of Falsification of Business Records in the first Degree, one count of Scheme to Defraud in the First Degree, and four counts of Criminal Possession of a Forged Instrument in the Third Degree. She was arraigned Thursday in First District Court, Hempstead, where a Nassau County judge ordered she be held on $20,000 bond or $10,000 cash. She is due back in court in Mineola May 26. Bareja faces a maximum of 15 years in prison if convicted of the top charges against her.
Rice said that starting in May of 2006, Bareja, while employed at EFI Capital Corp. in Garden City, and two yet-to-be-arrested co-conspirators used falsified employment records, financial information and appraisals to obtain more than $1.5 million in fraudulent mortgages. The co-conspirators would find a property they wished to buy and then have it appraised. They would either get a bogus appraisal or inflate and forge the appraisal on the mortgage loan application. They would support this loan request with falsified personal financial information. On one loan application, a co-conspirator’s bank account was listed as containing $200,000 when, in reality, his account balance had never exceeded $9,000. In at least one application, the borrower’s employment was listed as sales manager with an income of $15,000 per month. In reality, the borrower was a welder earning $11 an hour.
Once Bareja approved the loan for the inflated price, she and her co-conspirators would profit from the difference after the property was paid for. For example, a homeowner asking $200,000 for his or her home received their asking price, unaware that the purchaser had applied for, and received, a $400,000 mortgage from a lending institution who believed they were dealing with a far more valuable property and a borrower with both a high-paying job and substantial bank assets. Such a scheme would net the group a $200,000 profit and send the newly-purchased home into immediate foreclosure when the co-conspirators defaulted on the loan.
During the investigations, investigators analyzed Bareja’s E-mail account and found numerous forged financial and appraisal documents. Rice said that her office is continuing to investigate individuals she believes provided the group with the forgeries or others who may have profited from the scheme. Arrests of Bareja’s co-conspirators are expected in the immediate future, Rice said.
“When lending institutions are defrauded, honest potential homebuyers can get left out in the cold,” Rice said. “Ms. Bareja’s theft hurt her employer, clogged the court system with foreclosure proceedings, and blighted neighborhoods with empty homes.
Rice added that while investigators and prosecutors are still determining the extent of the illegal profit, she believes the amount will be in excess of $500,000.
The case was investigated jointly by the New York State Banking Department's Criminal Investigations Bureau and the District Attorney's Office. The investigation is ongoing.
“As the primary regulator for mortgage bankers and brokers in New York, the Banking Department will not tolerate such fraudulent lending practices,” Richard H. Neiman, Superintendent of Banks for New York State, said. “The collaboration on this case between our Criminal Investigations Bureau and District Attorney Rice's team demonstrates the effectiveness joint efforts can have in the prosecution of such frauds. We will continue working with our law enforcement partners to aggressively pursue brokers and loan officers that use their positions to engage in such criminal activity."
Handling the case for the DA’s Office is Assistant District Attorney Brian Heid and the DA’s Crimes Against Real Estate unit. Thursday’s arrest of Bareja is the latest in a series of cases made by Rice’s newly-created Crimes Against Real Estate unit. The unit was formed in November 2008 and is targeting mortgage fraud, foreclosure rescue scams, straw buyer scams, appraisal fraud, unlicensed brokers and lenders, and real estate investment fraud.
Bareja is represented by Neil Greenberg, Esq.
The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.