A Benton man has pleaded guilty in New Jersey to a multimillion-dollar mortgage scheme that used false documents and "straw buyers" to profit on overdeveloped condominiums, U.S. Attorney Paul Fishman has said.
John Bingaman, 44, of Benton and Paul Watterson, 53, a Mountainside, N.J. property manager, pleaded guilty earlier this month before U.S. District Judge Jerome Simandle in Camden, N.J., federal court to separate informations, Fishman said in a statement. Each was charged with a count each of conspiracy to commit wire fraud and conspiracy to commit money laundering.
According to court documents, Watterson and co-conspirators recruited "straw buyers" to purchase homes at inflated rates in the Wildwood, N.J., area using mortgage loans obtained through fraudulent applications. Watterson and the others filed the applications containing false information about the straw buyers' assets to make them appear more creditworthy and in some cases obtained false documents to support the applications, Fishman said. Then, Watterson and others caused the documents to be submitted to mortgage brokers who knew they were false and approved the loans, the U.S. attorney's office said. Once the mortgage lenders disbursed the loan proceeds from the real estate closings, Watterson's co-conspirators divided the money, court documents say.
Bingaman and others used false information so he could purchase three properties, and he ultimately deposited three checks worth $241,789.98 into the account of a company he controlled called Five Stone Development, court documents say. He pleaded guilty Sept. 12, and his sentencing has been set for March 14.
Watterson netted $273,600 from five transactions and is set for a March 13 sentencing. Fishman's said.
Wire-fraud conspiracy is punishable by up to 30 years in prison and a $1 million fine; a money-laundering conspiracy charge can yield up to 10 years in prison and a $250,000 fine.