Monsey - Orthodox Man Accused of $292,000 Mortgage Scam
A 39-year-old Monsey man was charged with pocketing $292,000 from a bank by fraudulently hiding an existing mortgage on the same property, prosecutors said today.
Aharon Farkas obtained a $250,000 line of credit loan from TD Bank on June 13, 2008, for property at 3 Hill Top Lane in Highland, N.Y., prosecutors said.
Farkas is accused of then obtaining a $292,000 mortgage using the same Ulster County property as collateral from the Florida Capital Bank a month later in July 2008.
Farkas is accused of signing documents stating there were no outstanding loans on the property, leading to the accusation that he falsely obtained $292,000 from the Florida Capital Bank, District Attorney Thomas Zugibe said.
Farkas was charged with a felony count of second-degree grand larceny following an investigation by the Rockland District Attorney’s Office Special Investigations Unit.
Farkas took out the second mortgage with Florida Capital before the first loan from TD Bank had been recorded in the County Clerk’s Office, Zugibe said. So a routine title search on the property didn’t find any mortgages, he said.
Farkas told the second bank there were no outstanding loans on the Ulster County property, Zugibe said.
“He obtained proceeds from a mortgage that far exceeded the value of the house,” Zugibe said. “He denied there was any mortgage on the property. He defrauded the bank out of the $292,000 proceeds with the same mortgage.”
Farkas, who lives at 10 Jill Lane, was arraigned on the felony charge by Spring Valley Justice David Fried and released from custody after posting $15,000 bail. Fried required that Farkas surrender his passport.
Farkas is scheduled to return to court on June 20.
The grand larceny count carries a maximum prison sentence of 15 years.
Mortagage juggling has come before the Rockland District Attorney’s Office before as people look to make money by defrauding the system, Zugibe said.
Zugibe said a few years ago one couple took out four mortgages on the same property within a week before financial papers were filed for a title searcher to find, he said.
Zugibe said if people then default on the mortgage, they might lose their property and have a lien against them, but they have the money.