A Jersey City mortgage broker, who owned a property management company, has been sentenced to eight years in state prison after admitting to conspiring to steal over $1.2 million from lenders by filing fraudulent mortgage applications, Acting Attorney General John Jay Hoffman announced.Â
By John Heinis/Hudson County View
Brian Lyles, 43, of Jersey City, the owner of BKL Property Management, LLC, was sentenced to eight years in state prison, including two years and eight months of parole ineligibility, by Superior Court Judge Stuart A. Minkowitz in Morris County on Thursday.
Lyles pleaded guilty on Feb. 11 to first-degree money laundering. Lylesâ€™ company, BKL, pleaded guilty through its attorney to second-degree theft by deception. BKL must pay $200,000 in restitution as a result of the guilty plea.
In pleading guilty, Lyles admitted that he laundered the proceeds of a criminal scheme in which he conspired with others to falsify loan applications in order to cause banks to loan money to unqualified home buyers for the purchase of homes in Jersey City at inflated prices, officials said.
He and his co-conspirators fraudulently obtained four loans totalling more than $1.2 million, authorities said.
The scheme involved arranging two simultaneous sales of each property and diverting loan proceeds. Straw purchasers initially bought the homes through â€œshort sales,â€ which are pre-foreclosure sales where the mortgage holder agrees to permit the home to be sold for less than the amount due on the loan, court documents show.
The straw purchasers in turn sold the homes at much higher prices to other purchasers – who were the borrowers for the fraudulently obtained loans, according to court records.
Those purchasers were recruited with a pitch that they could obtain investment properties with no money down and receive rental income, authorities said.
The loan proceeds were used to make the initial discounted purchase in the short sale. After making certain other required payments, Lyles and his co-conspirators stole the remaining loan proceeds by diverting them at closing, officials said.
â€œWhite collar criminals like Lyles are all the more culpable because they have the training and wherewithal to earn an honest and ample living, but instead choose to steal,â€ Hoffman said in a statement.
â€œWe are putting these con artists on notice that financial fraud is not the road to riches, itâ€™s the road to prison.â€