A former manager at Wells Fargo Home Mortgage Inc. has been handed down a prison sentence for defrauding his former employer.
The case involves a total of 10 defendants who were originally charged in 2012 for a mortgage fraud conspiracy involving $40 million in loans.
According to the U.S. Department of Justice, the defendants sought out distressed oceanfront resort properties in South Carolina and Georgia.
Properties were also targeted in New Jersey, where all of the defendants lived.
Straw buyers with good credit scores but no financial resources were used to purchase the properties. In order to qualify the borrowers, fraudulent income and asset documents were used.
Among the 10 defendants charged in August 2012 was Robert Serao, according to the U.S. Attorney’s Office for the District of New Jersey.
Case documents indicate Serao worked for Wells Fargo — at various points holding the positions of branch manager, sales manager and loan officer.
Thanks to his participation in the scheme, the Des Moines, Iowa-based lender funded more than $4.6 million in fraudulent loans.
For his participation, Serao earned bigger commissions from loan closings.
“Serao’s conspirators caused fraudulent mortgage loan applications and supporting documents to be submitted to Wells Fargo and numerous other mortgage lenders in various straw buyers’ names, attributing to them inflated income and assets in order to induce the mortgage lenders to approve the loans,” the Justice Department said. “Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with the real estate closings on the properties, Serao’s conspirators took a portion of the proceeds from the fraudulent mortgage loans.”
Serao pled guilty in March of this year to one count of conspiracy to commit wire fraud. It was the 10th guilty plea in the case.
On Thursday, he was sentenced by U.S. District Judge Joseph E. Irenas to 24 months in prison.
In addition, Serao was ordered to pay $1,520,606 in restitution.
