Nevada Man Used Jersey City Property In $9M Shotgun Scheme: DOJ

JERSEY CITY, NJ — A Jersey City property was used in a scheme to obtain home equity lines of credit, according to the Department of Justice.

Joseph A. Gonzalez, 46, of Nevada, was sentenced to 18 months in prison for his role in a scheme to use false information and simultaneous loan applications at several banks – known as “shot-gunning” – to attempt to obtain home equity lines of credit.

From 2010 through 2018, Jorge Flores and Simon Curanaj ran a mortgage fraud scheme in which they applied for more than $9 million in HELOCs from banks on residential properties in New Jersey and New York.

Gonzalez and Flores used a property in Jersey City as part of the scheme.

The owner of the property allowed Gonzalez to live there as long as he handled management services. Gonzalez also brought in a "straw buyer" or someone with good credit. The owner of the property had no idea that a “quitclaim” deed – which contains no warranties of title – was prepared transferring the property to the straw buyer — the signatures were forged, according to the DOJ.

Gonzalez and Flores then applied for two HELOCs from multiple banks using the Jersey City property as collateral in the straw buyer's name, according to the DOJ. The applications were full of false information and hid the fact that the property offered as collateral was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender, according to the DOJ.

The banks issued loans to the straw buyer in excess of $500,000. After the banks funded the HELOCs and deposited money into the buyer's bank account, the person disbursed almost all of it to Gonzalez, Flores, and others. Gonzalez used $43,000 of the illicit proceeds to buy a luxury car. The buyer eventually defaulted on both HELOC loans.