From the Herald News:
Magnate guilty in housing scheme
A Bergen County real estate magnate who for years exploited unsuspecting Paterson homebuyers while bribing low-level city employees, pleaded guilty Wednesday to conspiracy to commit money laundering.
Michael Eliasof, of Mahwah, agreed to a plea deal with federal prosecutors in U.S. District Court for overseeing a wide-ranging, house-flipping scheme between 2002 and 2005 that undermined an already shaky Paterson housing market. Eliasof, who at one time was a major operator in Paterson’s Section 8 program, was charged with taking between $1 million and $2.5 million in illegal proceeds from the sale of overvalued properties to buyers not qualified to purchase them.
The circle of professionals Eliasof worked with included Garfield Municipal Judge William C. Colacino Jr., who was the closing attorney for dozens of deals Eliasof lined up with inexperienced buyers. Colacino was not in court Wednesday and has not been indicted. He declined to comment Wednesday.
Eliasof and 10 co-conspirators, including mortgage brokers, loan officers and appraisers, artificially inflated the values of properties throughout Paterson. They then falsified loan applications and income levels for those buyers whom Eliasof lured in with “no money-down” deals, according to the federal charges.
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It is unclear what will become of Eliasof’s conspirators, who are referred to in federal documents by initials, including “W.C.,” a Garfield attorney who represented the buyers; “G.C.,” of U.S. Mortgage Corp in Pine Brook; “A.M.,” a loan officer at United Home Mortgage Company in Jersey City; and “W.O.,” aka “Billy the Kid,” an appraiser with Equity Appraisals, also in Pine Brook.
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Ralph Roberts, a Michigan Realtor and author of “Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership,” said there’s a reason this type of fraud exists.“It’s extremely profitable,” Roberts said. “That’s why they do it. It’s easier than working.”
As lucrative as the deals are, they often falter and leave a distinct footprint on communities.
“They hurt the neighborhoods, they hurt the tax base, they the hurt schools,” Roberts said. “Imagine living across the street from the house that now sits vacant.”