White Collar Crime News

CEO accused of $11 million mortgage fraud scheme September 8, 2009

This company does not seem like a one man operation.  However, the FBI only arrested Findel.  The underlying charge is not too difficult to find as it is easy to get in touch with the lenders.  The issue I have is why is no one else charged here?  I understand the buck stops here, etc, etc, but his attorney needs to determine if anyone else has made a statement.  I would interview everyone at the company and lock them into a statement now.  The problem will likely be with employees that were let go in the last two years.  They could be the leak here.  Regardless, its better to find out now instead of later.

NEWARK, NJ— Today, Special Agent In Charge Weysan Dun announced the surrender of Findel, the 44 year old President and CEO of Worldwide Financial Resources, on a single charge of wire fraud.

A criminal complaint filed today in Newark charges Findel, of Colts Neck, New Jersey, with submitting false documents to financial institutions in a mortgage reselling scheme. Findel’s actions caused those institutions to wire money to Findel’s company, Worldwide Financial Resources (herein referred to as “WFR”) located at 50 Route 9 North, Morganville, New Jersey. Originally started as a financial planning company, WFR had been expanded by Findel to include a variety of home mortgage services, to include mortgage origination and banking. This allowed WFR to both initiate and fund mortgages for its clients by borrowing money from a “warehouse lender”. To repay the lender, WFR would resell each home mortgage it originated in the secondary mortgage market at a profit.

Because of the housing crisis, WFR experienced a liquidity crisis in January 2008. That is when Findel perpetrated a scheme to defraud mortgage banks by reselling the same mortgages to multiple financial institutions, according to the criminal complaint. It is important to note that once WFR sold a mortgage, it relinquished any and all financial interest in that mortgage. But Findel would then create a second set of fraudulent mortgage documents (loan applications, promissory notes, closing sheets, settlement forms, etc.) and resell –for a second time, the same mortgage to a different secondary lender. Funds from the secondary lender’s account were wired through an escrow company to the account of WFR. Findel allegedly used those funds to pay corporate and personal expenses. The complaint alleges that Findel obtained more than $11 million from secondary lenders through his fraudulent mortgage transactions.

Findel had an initial appearance this afternoon before Honorable Mark Falk, United States Magistrate Judge. Falk released Findel on $1 million secured bond. If convicted, Findel faces a maximum prison sentence of 20 years and $250,000 in fines.