Father, Son Sentenced in $4.4M Mortgage Fraud Scheme

A father and son who obtained $4.4 million in a mortgage loan fraud scheme through a Monmouth based company were sentenced to prison Thursday, according to U.S. Attorney Paul J. Fishman.

Vito C. Grippo, 58, of Jackson, president of Holmdel-based Morgan Financial Equity Shares and Vanick Holdings and Frederick “Freddie” Grippo, 32, of Old Bridge, an officer of Vanick Holdings, masqueraded mortgage loans as a foreclosure rescue operation, Fishman said.

Between January 2008 and February 2010, Vito Grippo made Morgan Financial appear as a company that could help homeowners facing foreclosure through the “Equity Share Program.” The program created a limited liability company (LLC) in the name of the homeowner’s house, Fishman said. The homeowner would own 90 percent interest while one or two private investors would own the remaining 10 percent.

The investors did not actually invest money and were straw buyers recruited by Vito or Frederick Grippo, because they had good credit. The Grippos and their associates then applied for mortgages in the names of the so-called investors for the purchase of the properties own by the homeowners, Fishman said.

The homeowner would go to Vito Grippo’s office in Holmdel and sign documents to prevent foreclosure. The homeowners often did not understand that they would be transferring title to their homes to the investor, Fishman said.

The Grippos and their associates filled out new mortgage loan applications with false information about the loan applicant’s monthly income, assets and whether the home to be bought would be a primary residence, Fishman said.

Frederick Grippo locked in the approval of the applications at Worldwide Financial Resources.

Money was then wired to the settlement agent for a given transaction, and Vito Grippo would direct the loan proceeds to bank accounts that he controlled.

Properties throughout the Metropolitan area lost money through the Equity Share Program, including homes in Rutherford, Monroe and Brooklyn.

Vito Grippo did not report $289,780 in gross income from the activities of Vanick Holdings LLC for 2006. For 2007, he didn’t report $213,261; 2008, $1,366,261.

Vito Grippo previously pleaded guilty before U.S. District Judge Kevin McNulty to an indictment charging him with one county of conspiracy to commit wire fraud, two counts of filing a false tax return for the years 2006 and 2007, and one count of aiding and procuring the filing of a false tax return for the year 2008.

Frederick Grippo previously pleaded guilty before Judge McNulty to an indictment charging him with one count of conspiracy to commit wire fraud.

Vito Grippo was sentenced to 98 months in prison while Frederick Grippo was sentenced to 41 months.

McNulty also sentenced Vito Grippo to five years and Frederick Grippo to three years of supervised release.