NEWARK, N.J. — Three attorneys and a realtor from New Jersey have been indicted by a federal grand jury for their roles in a fraudulent short sale scheme that defrauded financial institutions, U.S. Attorney Philip R. Sellinger announced on Wednesday.
The defendants, Bruce Egert, 69, of Tenafly, Nelson Kong, 44, of Bethpage, New York, Seung Han Shin, also known as Aaron Shin, 42, of Old Tappan, and Francisco Sanchez, 48, of Ridgefield Park, face charges of conspiracy to commit bank fraud and three counts of bank fraud. Egert and Kong also face three counts of making false statements to a financial institution.
According to court documents, between June 2013 and December 2016, the defendants fraudulently induced mortgage lenders into approving short sales by making false representations. In short sales, lenders allow distressed homeowners to sell their homes for less than the amount owed on the mortgage. The defendants are accused of failing to disclose that they had already arranged to resell the properties at much higher prices in violation of deed restrictions and other regulations. Some properties were resold the same day as the short sale closing, generating substantial profits.
Egert, Kassai’s attorney, is alleged to have conspired with him to use stolen identities to purchase properties and submit fraudulent settlement statements to the banks. Kong, who represented certain sellers, drafted agreements to manage the short sale process. Shin, a bankruptcy attorney, filed petitions to delay foreclosures without revealing Kassai’s involvement. Sanchez, a realtor, allegedly helped arrange straw buyers when banks rejected Kassai’s offers.
The four defendants were arraigned in Newark federal court and released on $100,000 unsecured bond.
Several other individuals involved in the scheme, including Mehdi Kassai, Steve Kang, and Joshua Son, have previously pleaded guilty to charges related to the fraud. Kassai, who was sentenced to 16 months in prison and ordered to pay $7.94 million in restitution, was the central figure in orchestrating the transactions.
Each count of conspiracy to commit bank fraud, bank fraud, and making false statements to a financial institution carries a potential penalty of up to 30 years in prison and a $1 million fine.
The investigation remains ongoing.
