NEWARK, NJ — Ten people accused of abusing the New York City Special One Time Assistance Program (SOTA) were indicted today and arraigned on charges that they participated in a countywide mortgage fraud scheme, the Essex County prosecutor announced.
The defendants face racketeering, theft, tampering with records and money laundering charges in an alleged plot that involved the scam sales of investment properties in Newark, East Orange and Irvington.
According to the Acting Essex Prosecutor Theodore Stephens, II, the buyers were led to entrust the entire mortgage application process to Darnell Alford, 42, and Travis Glover, 57, with little to no down payment and sometimes never having seen the home in person.
Alford and another associate, Christina Barnett, allegedly told the buyers that they would manage their homes, which would be rented out to tenants that would provide a monthly income for the buyers. According to Stephens, the alleged mortgage fraud ring was doing business under the name of four companies: Alford & Associates; Integrity First Construction and Property Management; Barnette Consulting Group; and 83 & Company.
Many of the homes purchased were sold at inflated prices, with Alford, Glover Barnett and associate Vera Johnson allegedly conspiring to facilitate the purchase of a total of seven homes for $1.8 through deceptive borrowing. Stephens claims that they laundered money by temporarily gifting it to buyers to obtain the loans from mortgage companies, and the gift money was then recovered from the inflated loan disbursed at the time of closing.
Buyers say they were unaware that the $50,000 to $106,000 in borrowed money was being paid back to Alford, Glover and Johnson. In some cases, the buyers were told their student loans would be paid off as part of the transaction.
Barnett, the property manager, failed to maintain the properties, which were dilapidated. Many of the tenants were homeless families and individuals who were recipients of the New York City SOTA program.
The SOTA program, which prepaid landlords to relocate homeless families, gained widespread attention in December when Newark Mayor Ras Baraka filed a federal lawsuit against New York City. The suit claimed that some landlords would let properties lapse and take advantage of homeless families after receiving the program’s one-time payment upfront.
“We want to make sure they are not taken advantage of by unscrupulous landlords. We want to make sure we can provide them the necessary social and educational services," Baraka said in December.
After collecting the year of prepaid rent from SOTA, the defendants are said to have abandoned the properties with the funds and left the buyers and tenants to fend for themselves. All the properties fell into foreclosure.