Delco man charged in $600k mortgage fraud at Shore

Posted: May 25, 2012

A Dela­ware County man was charged Thurs­day with join­ing a mort­gage fraud con­spir­a­cy that resulted in losses of more than $600,000.

Federal prosecutors said Mi­chael J. Smith, 31, of Spring­field, was a mort­gage bro­ker for companies in West Chester and New­town Square, who schemed with John C. Lucidi, Jr. and Eric Maratea, among others, to buy properties at the Jer­sey Shore at inflated prices so buyers could re­ceive kickbacks of tens of thousands of dollars.

Smith, who was one of the buyers, schemed with Lucidi, Maratea and others be­tween Oc­to­ber 2006 and June 2007, to pur­chase properties in North Wildwood, N.J., authorities said. The in­dict­ment said that the kickbacks were not disclosed to var­i­ous mort­gage lenders and that Smith applied for the mortgages him­self and helped others ap­ply for mortgages using bo­gus in­for­ma­tion. Smith was charged with con­spir­a­cy, wire fraud and mon­ey laundering.

Maratea and an in­di­vid­u­al iden­ti­fied in the charging doc­u­ment as "B.K.," were buyers of Smith’s properties but made few or no payments on their mortgages, forcing lenders to fore­close on the properties and re­sell them at a frac­tion of the un­paid bal­ance to re­cov­er losses, the in­dict­ment said.

Smith profited from the scheme, the in­dict­ment said, by making inflated commissions on the transactions, by receiving kickbacks on his own purchases and by making a prof­it when he managed to flip them at inflated prices to oth­er buyers.

Lucidi, of Jack­son­ville, Fla., who was also for­mer­ly a mort­gage bro­ker in West Chester and New­town Square, pleaded guilty to mort­gage fraud in Au­gust that cost banks more than $7 mil­lion be­tween May 2005 and Oc­to­ber 2008. He is to be sen­tenced next month and could face a pris­on term of nine to 11 years.

Maratea, who worked for a pain­ter’s union, was charged with con­spir­a­cy, wire fraud and related offenses by the U.S. At­tor­ney on May 7. Court records in­di­cate he has guilty plea hearing scheduled for June 19.

Con­tact Mi­chael Hinkelman at 215-854-2656 or hinkelm@phillynews.com or fol­low on Twit­ter @MHinkelman.

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