Property bought by a Jersey City mayoral candidate is linked to a local man indicted in a multi-million dollar mortgage fraud scheme, but Lewis Spears says he never met the seller and was not aware of the criminal charges against Anthony Garvin in 2019.
The US Department of Justice alleges Garvin staged a series of short sales in Jersey City and other municipalities using straw borrowers and submitting loan applications using fake pay stubs and d tax information for obtaining mortgages and home equity line of credit (HELOC) loans. .
Spears bought the house at 782 Grand Street from Garvin’s company, Merchantman LLC, in March 2010 for $ 265,000, but after making a down payment of $ 4,800, he never made any mortgage payments. At the time Bank of America seized its property, Spears owed them $ 414,527 – including unpaid property taxes and liens on the property for breach of code, according to records filed with the County of Deeds and Mortgage Register. Hudson.
The Spears campaign publicly addressed the foreclosure of the uninhabitable home, but said it was unaware of Garvin.
“This is the first time I’ve heard of this guy,” Spears told the New Jersey Globe on Monday. “I wouldn’t be able to pick him out of a lineup.”
The circumstances surrounding the transaction are vague and the grim real estate transaction appears to heighten the mystery surrounding the purchase.
Spears says he bought the property at the suggestion of a man named James, whom he described as a “friend of the church,” but he couldn’t find the friend’s last name. .
âI wanted to buy a house,â Spears said. “After the deal was done, I never spoke to him again.”
During a telephone interview, Spears could not recall the details surrounding the purchase of his real estate transaction. He couldn’t remember when he first saw the property at 782 Grand Street, or who showed it to him, although he said his friend, James, might have been associated with the owner.
Records show that Spears filed a notice of real estate settlement on the Grand Street house on October 21, 2009, with Kenneth Williams listed as the seller, and a second notice a week later listing Village Capital & Investment in Mount Laurel as the mortgagee. None of the documents were signed by Spears; instead, they were both executed by Chris Zinn, owner of a title insurance company in Berkeley Heights.
Spears has firmly denied being involved in the deal in October, saying he didn’t complete the deal until March 2010.
Hudson County records reflect conflicting seller documentation.
A deed from March 23, 2010 shows that Spears bought the house from Merchantman, the company owned by Garvin, for $ 265,000, but this document reveals that Spears had previously sold the house to Kenneth Williams on February 5 for $ 1. Records show Williams purchased the same Grand Street residence in 2001 for $ 25,000.
The lawyer who signed this document, Ralph P. Allocca, died in 2011 at the age of 52.
Court records identify Williams as a resident of South Plainfield, and his home address is the same as that of the CEO of Visionary Designs Construction, a home improvement company. Williams did not respond to an email Monday seeking comment on his connection with Garvin.
The charges against Garvin reflected transactions from January 2011 – roughly nine months after the 782 Grand Street deal – to November 2017.
Spears said he had never been interviewed by law enforcement officials investigating Garvin.
Also on March 23, Spears’ signature appears on a mortgage with Franklin American Mortgage Company. Spears’ mortgage attorney, Maureen R. Stillwell, was the same one who witnessed the transaction between Garvin’s law firm and Williams. Stillwell, a closing supervisor at the Ideal Title agency in Edison, also notarized the deed between Spears and Garvin’s firm.
Spears, who faces Jersey City Mayor Steven Fulop in the non-partisan municipal election on Nov. 2, said he was not aware of any records related to his purchase of the Grand Street home.
“I have never seen these documents,” he said of five documents provided to him by the NJ Globe.
The 2009 mortgage deal, which Spears denied being a part of, was never executed. Zinn Title Agency was not part of the final deal.
Still, Spears was unable to provide details on how he secured a mortgage on an abandoned property with just 2% off with no apparent intention to improve it.
He told the NJ Globe that he tried to sell the house in 2011 and 2012, but the mortgage holder was unwilling to approve a short sale.
This put him in a tough spot as the owner of a dilapidated house without the ability to make it usable. Spear said his credit rating had dropped and he feared he would never be able to buy another home.
But only thirteen months after the lockdown – Spears said he got nothing after Hudson County Sheriff Frank Schillari sold the Grand Street property at auction to real estate developer 161 Jordan LLC for 457 $ 000 – he and his wife have been approved by M&T Bank for an amount of $ 322,000. mortgage on his current Jersey City residence.
Allegations against Garvin
The US attorney’s office says Garvin and anonymous conspirators allegedly organized “simultaneous fraudulent transactions on the same target property” in a multi-step process.
âIn the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to agree to the sale of the target property at a loss, usually to a buyer who was secretly a conspirator or a entity controlled by the conspiracy, âa statement from federal prosecutors said.
In the second transaction, prosecutors allege that “the conspirators transferred the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using bogus loan applications, payroll, bank account statements and title reports provided by conspiracy members. The second trade was often closed for a significantly higher price, or even double the price of the first trade. “
The statement accompanying Garvin’s indictment claimed that he “rigged the short sale process at every step to maximize the price difference between the two transactions and prevent victim financial institutions from detecting the fraud.”
“The conspirators used various types of false documents and misrepresentation, including generating false pre-approval letters from a New Jersey company controlled by a conspirator and generating bogus acts that predated the closing date of the first. transactions, “the statement read.
While researching HELOC loans, Garvin allegedly “submitted loan applications on behalf of straw borrowers, who did not actually reside in the properties in question, and used false and fraudulent information – including false pay stubs and tax information – to make it appear as though the straw borrowers made more money than they actually made.
“The conspirators frequently applied for multiple HELOC loans on the same property almost simultaneously, denying each lender the existence of other demands,” prosecutors said. âThe conspirators then disbursed funds received from financial institutions – which totaled millions of dollars – into various accounts they controlled to cover up their illegal activities and share the profits. “
Garvin has been charged with one count of bank fraud conspiracy and five counts of bank fraud. He has pleaded not guilty and is still awaiting trial in United States District Court.