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Scheme Involved 56 properties, 18 Players

Charles Harvath pleads guilty

July 25, 2011

By JOSH McCANN The Island Packet - McClatchy-Tribune Information Services

A new filing in New Jersey mortgage fraud case indicates that mortgage lenders lost more than $40 million in a scheme involving 56 properties and 18 co-conspirators.

New Jersey authorities have released 33 pages of information about the mortgage-fraud scheme involving Blair Witkowski of Bluffton after a New Jersey man admitted last week to participating in it.

The information explains more about the size of the scheme and how it worked.

In laying out their charges against Charles Harvath, 33, of Lodi, N.J., authorities said the scheme caused lenders to lose more than $40 million.

Harvath pleaded guilty Tuesday to one count of conspiracy to commit wire fraud, which carries a potential penalty of 30 years in prison and a $1 million fine; and one count of conspiracy to commit money laundering, which carries a potential penalty of 10 years in prison and a $250,000 fine.

A charging document in Harvath's case says 56 properties were involved -- 35 in New Jersey and 21 in South Carolina and Georgia, including properties on Lady's Island and in Bluffton, Okatie, Port Royal, Savannah and Beaufort.

The document also says the affected lenders include Carolina First Bank, Beach First National Bank, Harbourside Community Bank, Palmetto State Bank and Lowcountry National Bank.

The document lists Witkowski, a former mortgage loan officer at Carolina First and Bank of America, as one of Harvath's 17 co-conspirators.

Witkowski, charged with conspiracy to commit bank fraud, was sentenced in May to 20 months in prison and ordered to pay more than $6.7 million in restitution. A document filed by his attorney in March said federal authorities are prosecuting "at least five other people" as a result of Witkowski's cooperation.

Witkowski, who has repeatedly and publicly apologized for his actions, said Friday he was not involved in the New Jersey transactions.

"The common thread is that we shared investors who purchased property both in South Carolina and New Jersey," Witkowski said.

He also said he hopes authorities crack down on other participants.

"I hope they continue to charge the rest of the people involved, especially in the Hilton Head area," Witkowski said.

Those participants include builders, appraisers, closing attorneys, buyers and Realtors, he said.

The document says Harvath and co-conspirators sought to profit from the sale of oceanfront condominiums overbuilt by financially distressed developers in Wildwood Crest, N.J.; premier real estate in vacation destinations in Georgia and South Carolina; and properties in New Jersey owned by financially distressed homeowners facing foreclosure.

It also says they obtained mortgage loans for unqualified borrowers using fraudulent loan applications and other documents and "took proceeds from the fraudulent mortgage loans by having funds wired or checks deposited into various accounts that they controlled."

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Copyright (c) 2011, The Island Packet, Hilton Head Island, S.C.

Distributed by McClatchy-Tribune Information Services.

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