2 arrested in New Jersey for allegedly stealing nearly $1 million in identity theft, mortgage fraud scheme

TRENTON, N.J. — A man and a woman were arrested Wednesday on first-degree charges for allegedly carrying out an elaborate identity theft and mortgage fraud scheme in which they stole nearly $1 million from various lenders.  Another man who allegedly participated in the criminal scheme is being sought as a fugitive.

The arrests resulted from an investigation led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the N.J Attorney General’s Office, U.S. postal Inspection Service and Federal Housing Finance Agency.

Artis Hunter, 49, of Union Township, New Jersey, the alleged ringleader, and Melissa Phillip, 41, of West Orange, were arrested on charges of first-degree money laundering, first-degree conspiracy, second-degree identity theft and second-degree theft by deception.

The third defendant, Laquan Jones, 42, of Newark, is being sought on an arrest warrant on the same charges. Bail has been set at $500,000 for Hunter, and $250,000 for Phillip.  Investigators executed search warrants at Hunter’s home in Union and a second home in Hillside, seizing computers, phones, additional electronic equipment, documents and other potential evidence.

“We allege that these defendants were prolific in their criminal scheme, stealing nearly $1 million from lenders by using stolen or fictitious identities to stage loan closings that were almost entirely illusory,” said N.J Attorney General Christopher Porrino. “With these arrests, we’ve put an end to their costly tricks.”

According to court documents, the defendants and additional unidentified co-conspirators allegedly used stolen identities to steal more than $930,000 from lenders through at least eight fraudulent loan transactions, including four mortgage loans, three home equity lines of credit (HELOCs), and one car loan.  The defendants allegedly used stolen or fictitious identities not only for the borrowers, but for numerous other persons and businesses connected to the transactions. They created all of the hallmarks of a legitimate residential loan transaction by using stolen and fictitious identities to fill all of the required roles: seller, attorneys, settlement agent, title agent, homeowner’s insurance company, notary and other parties. The loan applications contained many falsified documents, including closing documents, wire transfer documents and title insurance documents, all of which were purportedly witnessed, prepared or reviewed by parties and professionals who, in fact, either did not exist or had no knowledge of the transactions.

By creating the illusion of a legitimate transaction, the defendants allegedly deceived unsuspecting lenders into processing the fraudulent loan applications.  Once the loan was approved, the victim-lender disbursed the loan proceeds – in the case of the mortgage loans, amounts ranging from $196,000 to $230,000 – to a bank account opened in the fictitious or stolen name of a title company or law firm. At that point, the defendants or other co-conspirators allegedly withdrew the loan proceeds by visiting ATMs and bank branches in New Jersey to make numerous and frequent withdrawals. The withdrawals occurred over a period of time ranging from several weeks to several months until the entire amount stolen from the lender was withdrawn. Frequently, participants allegedly withdrew several thousand dollars from various ATMs or bank offices in a single day. The scheme dates back to at least 2010.

The owners of the homes connected to the loans were never really parties to the transactions, and with respect to the mortgage loans, none of the homes were actually sold. The defendants allegedly established virtual offices for certain individuals and businesses purportedly involved in the loan transactions by setting up dozens of phone numbers, email addresses, fax numbers, websites and mail drop addresses. They allegedly took these steps to maintain the appearance that lawyers, employers, borrowers, sellers, settlement agents, title insurance companies, homeowner’s insurance companies, notaries and other persons were actively involved in legitimate lending transactions.

First-degree money laundering carries a sentence of 10 to 20 years in state prison, including a mandatory period of parole ineligibility equal to one-third to one-half of the sentence imposed, and a fine of up to $500,000. The first-degree conspiracy charge carries a sentence of 10 to 20 years in state prison and a fine of up to $250,000. Second-degree crimes carry a sentence of five to 10 years in state prison and a fine of up to $150,000.

The complaints filed against the defendants are merely accusations and they are presumed innocent until proven guilty.  Because they are indictable offenses, the charges will be presented to a grand jury.