Wildwood man charged in $13 million mortgage scam

Last Updated on Friday, March 22, 2013 02:51 pm Written by Christie Rotondo Friday, March 22, 2013 02:49 pm

WILDWOOD - A Wildwood man has been charged with committing a $13 million mortgage scam where he and co-conspirators faked documents and used straw buyers to make illegal profits on condos in the Wildwoods, U.S. Attorney Paul J. Fishman announced Friday.

Daniel Cardillo, 49, and John Leadbetter, 54, of Kearny, N.J., were charged in a superseding indictment with conspiracy to commit wire fraud. Leadbetter was also charged with money laundering.

According to Fishman’s office, the wire fraud conspiracy charge carries a maximum penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum penalty of 10 years in prison and a $250,000 fine.

Cardillo is expected to appear in federal court Monday, before U.S. District Chief Judge Jerome B. Simandle in Camden. Leadbetter surrendered to F.B.I. agents this morning and is expected to appear before a judge this afternoon.

According to the indictment, Cardillo acted as a straw buyer in the scam. Leadbeater and his co-conspirators found condominiums overbuilt by financially distressed developers in Wildwood and Wildwood Crest and recruited straw buyers, including Cardillo, to purchase those properties.

The straw buyers had good credit scores, but lacked the financial resources to qualify for the mortgage loans, the indictment says. The conspirators created false documents such as fake employment records, W-2 forms and investment statements to make the straw buyers appear more credit-worthy than they actually were so they could secure mortgage loans.

To prepare the straw buyers’ false loan applications, Leadbeater and his conspirators drew up fraudulent mortgage loan applications the straw buyers’ names, including the supporting documents, to be submitted to mortgage brokers. According to the indictment, the brokers knew the documents were false.

Once the loans were approved and the mortgage lenders paid for closing costs on the properties, Leadbeater and his conspirators took a portion of the loan money and had funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to the other members of the conspiracy for their respective roles. 

Some previously charged co-conspirators have already pleaded guilty in connection with the scheme. Angela Celli, 42, of Somerset, Mass.; Robert Horton, 37, of Nashport, Ohio; and Justin Spradley, 35, of Cincinnati, pleaded guilty before Chief Judge Simandle and await sentencing.