TRENTON, NJ – A man in Morris County, New Jersey today admitted his role in a reverse mortgage fraud scheme that exploited several elderly homeowners, US Attorney Philip R. Sellinger said.
Martin D. Eagan, 50, of Montville, New Jersey, pleaded guilty before U.S. District Judge Anne E. Thompson to a report accusing him of conspiracy to commit bank fraud.
According to the documents filed in this case and the statements made in court:
Eagan, principal of the Martin D. Eagan law firm, was a licensed New Jersey attorney with a practice in Morristown, New Jersey, which focused primarily on real estate transactions, such as loan origination, reverse mortgages and residential home refinancing.
From 2007 to 2010, Eagan, acting as a settlement agent, was required to comply with instructions issued by financial institutions that provided loan funds to borrowers. As part of the lending process, Eagan was required to generate and certify HUD-1 settlement statements that Eagan submitted to lenders. The HUD-1 settlement statement detailed the receipt and disbursement of all funds for each property closing. HUD-1 settlement statements had to be approved by a lender before a settlement agent could disburse funds. The disbursement of funds was to reflect the statements made on the HUD-1 approved by the lender.
Eagan and his conspirators have submitted fraudulent documents to lenders to persuade lenders to approve and fund reverse mortgages and the refinancing of existing mortgages. The fraudulent documents submitted included bogus HUD-1s that hid from lenders the fact that disbursements of the loan proceeds went to conspirators or entities that the conspirators owned or controlled, and bogus appraisals that overstated the value of the homes.
Eagan, his conspirators, and others controlled the loan application process from the time the homeowners applied for loans to the disbursement of loan funds, and ultimately the diversion of the loan proceeds to the conspirators.
Conspiracy to commit bank fraud carries a potential maximum penalty of 30 years in prison and a fine of $ 1 million. Sentencing is scheduled for April 14, 2022.
US Attorney Sellinger credited the special agents of the FBI, under the direction of the special agent in charge George M. Crouch Jr. in Newark, and the special agents of the Federal Housing Finance Agency, Office of the Inspector General, under the direction of the special agent in charge. Robert Manchak, with the inquiry leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorneys Kevin Di Gregory and Charlie L. Divine of the Federal Housing Finance Agency, Office of the Inspector General.