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Report Fraud, Waste and Abuse
Date Published
May 11, 2016
News Type
Press Release
Link to Original
USAO, District of New Jersey

(USAO, NJ) TRENTON, N.J. – A West New York, New Jersey, man who fraudulently obtained a federally insured mortgage for a West New York rental property today admitted intentionally failing to make loan payments while using $149,000 in rental income from the property for personal expenses, U.S. Attorney Paul J. Fishman announced.

Ruben Vargas, 65, pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of equity skimming.

According to the documents filed in this case and statements made in court:

On Sept. 21, 2007, Vargas obtained a $417,449 mortgage loan insured by the Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban Development (HUD), in order to purchase a property located at 5512 Grant Place in West New York.

Vargas had obtained the loan using supporting documentation that contained inflated income, false employment information and false rental history. By March 1, 2008, he had defaulted on the loan by failing to make timely payments. However, Vargas continued to earn nearly $3,000 in monthly rental income from the property by renting the first and second floors to separate tenants...