A New Jersey attorney and a real estate agent were charged with allegedly running a massive mortgage fraud scheme that caused more than $30 million in losses for at least five financial institutions, according to a criminal complaint filed last week in U.S. District Court in Newark.
Christopher Goodson, 44, of Newark, and Anthony Garvin, 47, of Jersey City, New Jersey, were charged with one count of conspiracy to commit bank fraud. They were arraigned on the charge on Nov. 16 and were each released on $250,000 bond.
Goodson is the sole partner of Goodson Law Offices LLC in Newark. He also is the founder of the New Jersey Real Estate Investment Club that purportedly has more than 2,000 members with an annual membership fee of nearly $300, according the club’s site. The law firm and the investment club were not named or implicated in any way in the criminal complaint. For more than 21 years, Garvin has been a licensed real estate agent and investor, according to his LinkedIn page.
From January 2011 through August 2017, Goodson, Garvin, and five other conspirators not identified in the criminal complaint ran a short sale mortgage fraud conspiracy that targeted dozens of New Jersey properties with mortgages that were in default. As part of the scheme, the conspirators arranged simultaneous fraudulent transactions on the same target property.
For example, in an initial transaction that involved the sale by the current owner, the conspirators convinced a financial institution holding the mortgage to accept the sale of the target property at a loss, usually to a buyer who was a conspirator or an entity controlled by the fraud ring.
Then, in a second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using fake loan applications, pay stubs, bank account statements and title reports provided by members of the fraud ring. That resulted in the second transaction frequently closings for significantly more or even double the price of the first transaction.
Prosecutors did not identify the financial institutions, and they did not respond to a CU Times request for additional information.
Goodson, Garvin, and others allegedly rigged the short sale process at each step of the process in order to maximize the difference in price between the two transactions and to keep the victim financial institutions from detecting the fraud, according to the criminal complaint.
For example, Goodson allegedly concealed that he played multiple roles in the short sale transactions, including generating false preapproval letters from a New Jersey corporation he owned that purported to be a short-term lending company based in California.
These letters were used to deceive the financial institutions into believing that the purchaser – typically a conspirator or entity controlled by Goodson – had the credit necessary for the transaction. The New Jersey lawyer also negotiated the fraudulent short sales with the financial institutions, generated phony deeds that backdated the closing date of the first transactions. What’s more, Goodson also was the closing attorney during some of the short sales.
The conspirators disbursed the funds into various accounts they controlled to conceal their illegal activities and split the profits, according to federal prosecutors.
The conspiracy to commit bank fraud count is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine.
