A Red Bank lawyer faces five to seven years in state prison after pleading guilty today to conspiring to steal more than $1 million from lenders.
Maeble L. Hairston, 57, entered a guilty plea on a racketeering charge before Superior Court Judge Thomas V. Manahan in Morris County. She must forfeit her license to practice law in addition to the prison time.
Attorney General Jeffrey S. Chiesa said in a statement that Hairston worked with others to file fraudulent mortgage applications, divert mortgage proceeds and falsify settlement statements.
“Con artists will always view mortgage loans and real estate closings as prime territory for their criminal activities because of the large sums of money changing hands,” said Stephen J. Taylor, director of the Division of Criminal Justice. “I commend the Essex County Inspector General for aggressively pursuing this investigation after uncovering an initial instance of fraud involving a homebuyer who worked for the county. That woman previously pleaded guilty.”
Hairston conspired with others in a scheme to falsify mortgage loan applications to cause banks to provide loans to unqualified straw purchasers for homes whose values were grossly inflated, Chiesa said. The co-conspirators would then steal loan proceeds by diverting them at closing.
In pleading guilty, Hairston admitted that while serving as settlement agent for four real estate closings involving a total of $1,051,804 in loans, she diverted loan proceeds to other members of the conspiracy and covered up the thefts by submitting fraudulent HUD settlement statements, Chiesa said.
Hairston admitted that she was part of a conspiracy in which co-conspirators would purchase discounted homes at sheriff’s sales or “short sales” — pre-foreclosure sales where the mortgage holder agrees to permit the home to be sold for less than the amount due on the loan — and would then sell the home at an inflated price to a straw purchaser, Chiesa said. The straw purchasers were told that they could obtain real estate with no money down as investment properties and receive rental income from the properties.
Previously, one of the straw purchasers, a former employee of the Essex County Division of Welfare, pleaded guilty to falsifying employment records in order to qualify for a loan to buy a home in Newark. Ijeoma Okoh, 34, of Newark, was sentenced to two years of probation on Jan. 24, 2011, and was required to forfeit her public position and her interest in the home.
It is expected that charges will be filed against additional defendants in the ongoing investigation, Chiesa said.
Manahan scheduled sentencing for Hairston for Dec. 7.