The owner of a Holmdel-based business was indicted today for his alleged role in a phony foreclosure rescue scheme that was part of a $4.4 million mortgage fraud, U.S. Attorney Paul J. Fishman announced.
Vito C. Grippo, 58, of Jackson, N.J., the president of Morgan Financial Equity Shares and Vanick Holdings LLC located at 22 S. Holmdel Road in Holmdel, was indicted by a federal grand jury on one count of conspiracy to commit wire fraud and three counts of filing a false tax return for the years 2006 through 2008.
On Nov. 29, his son Frederick “Freddie” Grippo, 32, of Old Bridge, N.J., formerly a loan officer at Worldwide Financial Resources and an officer of Vanick Holdings, pleaded guilty in Newark federal court to one count of conspiracy to commit wire fraud.
John Pereless, 44, of Colts Neck is also alleged to have conspired with Vito Grippo in connection with four of the 12 home sales with which Grippo is charged, and had pleaded guilty in July before a Superior Court Judge on two counts of second-degree theft by deception for filing fraudulent mortgage loan applications and stealing $661,261 in equity due to home sellers in connection with 14 homes, including the four transactions involving Vito Grippo.
According to Thursday's indictment, Vito Grippo presented Morgan Financial to the public as a company that could help financially distressed homeowners facing foreclosure through something Grippo called the “Equity Share Program” between January 2008 and February 2010. As described by Grippo and his associates, the Equity Share Program involved creating a limited liability company (“LLC”) in the name of the homeowner’s house in which LLC the homeowner would supposedly own a 90 percent interest with the rest to be owned by one or two private investors.
In reality, the so-called investors invested nothing and were instead straw buyers recruited by Vito Grippo or his son, Frederick “Freddie” Grippo because they had good credit. The Grippos and their associates then made out mortgage loan applications in the names of the “investors” for the purchase of the properties owned by the homeowners in distress. Freddie Grippo pleaded guilty before Judge McNulty on Nov. 28, 2012, to conspiracy to commit wire fraud.
A homeowner in distress would come to a closing in Vito Grippo’s office and be given a stack of documents to sign. The homeowners would be led to believe the documents would prevent foreclosure and frequently did not understand that they would be transferring title to their homes to the “investor.”
The so-called investor was, in reality, a straw buyer of the homeowner’s house. The new mortgage loan applications filled out by the Grippos or their associates in the name of one of the investors contained materially false information about the loan applicant’s monthly income, his assets and whether the residence to be bought would be his primary residence.
The new loan application would be submitted to Worldwide Financial Resources for processing, where Freddie Grippo, a loan officer at Worldwide, would see to it that the loan was approved. The loan money was wired to the settlement agent for a given transaction and Vito Grippo would direct the settlement agent to forward a portion of those loan proceeds to bank accounts that Vito Grippo controlled.
Properties whose original owners fell victim to the Equity Share Program were found throughout the metropolitan area, including homes in Rutherford, N.J., Monroe, N.J. and Brooklyn, N.Y.
Vito Grippo did not report $289,780 in gross income from the activities of Vanick Holdings LLC for the 2006 tax year. For the year 2007, he did not report $213,261. For the year 2008, he did not report $1,366,261.
The conspiracy count with which Vito Grippo is charged is punishable by a maximum potential penalty of 30 years in prison and a fine of $1,000,000. Each of the three tax charges carries a maximum potential penalty of three years in prison and a fine of $100,000.
U.S. Attorney Fishman credited special agents from the FBI’s Red Bank Resident Agency, under the direction of Special Agent in Charge Michael B. Ward in Newark; special agents from IRS—Criminal Investigation under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Phillip Bartlett, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Bohdan Vitvitsky of the U.S. Attorney’s Economic Crimes Unit in Newark.
The charges and allegations in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.