Former West New York Commissioner Ruben Vargas pleaded guilty to performing equity skimming with a $417,000 loan from the U.S. Department of Housing and Urban Development (HUD) in U.S. District Court in Trenton this morning, the U.S. Attorney’s Office confirmed.
By John Heinis/Hudson County View
Vargas, 65, pleaded guilty to purchasing a rental property with a $417,000 loan insured by HUD and purposely stopped making payments on it, but yet continued collecting rental income related to the property, according to the criminal complaint.
On or about September 21, 2007, Vargas obtained a $417,000 loan to purchase a multi-family property at 5512 Grant Pl. and collected rent payments from tenants between approximately 2007 and 2013, the complaint says.
Furthermore, the complaint also states that Vargas was in default of the loan and failed “to remit any of the monies collected to pay down the outstanding mortgage loan.”
The maximum sentence for equity skimming, which is where a person gains a title to another individual’s home, refinances it and takes out all the equity on the property, is five years in prison and a $500,000 fine.
Back in January 2012, I reported for The Jersey Journal that the state Department of Community Affairs was investigating five properties with outstanding building violations owned by Mayor Felix Roque, then-Deputy Mayor Silvio Acosta (who is currently a trustee on the board of education) and Vargas.
One of the properties in question was a Grant Place property owned by Vargas.
Building Code Official Tom O’Malley sued the town for wrongful termination in June of the same year, claiming he was retaliated against for reporting the aforementioned properties to the DCA, (h/t The Jersey Journal).
O’Malley and his wife Kim, who was included in the suit, settled the mater with the town in June 2014, each receiving about $200,000 in damages. They then returned to their respective Town Hall jobs in August of the same year.
Vargas was hired as the head of security for the West New York Housing Authority in February 2015 at a salary of about $35,000 a year, which we also first reported.
WNYHA Executive Director Bob DiVincent said he was unaware of the particulars of the situation and would have to gather all the facts before presenting it the board – who would ultimately decide whether or not to terminate Vargas.
“I would never expect it, I’m shocked,” he said over the phone.
In July of the same year, Vargas was hired as an outside operations manager at the West New York Parking Authority at a salary of $40,000, according to then-agency head Jamie Cryan.
WNYPA Acting Executive Director Amiris Perez did not immediately return a call seeking comment.
Additionally, Vargas is being represented by attorney Chris Adams, of Holmdel, who is also representing Roque in a state Attorney General’s case alleging that the mayor engaged in a $250,000 bribery and kickback scheme.
“He’s accepted his responsibility. He admits he failed to repay the loan but had to make very serious decisions on how to spend the money from the rent on his family and, unfortunately, the loan was not the priority,” Adams said.
He also said there was no correlation in the two separate criminal cases involving Vargas and Roque, respectively.
Vargas’ sentencing is scheduled for August 18 at 10 a.m.