TRENTON (June 22, 2013) – Acting Attorney General John J. Hoffman announced that a father and son from central New Jersey were sentenced to prison today for stealing more than a million dollars in a scheme in which the father promised to rescue homeowners who were facing foreclosure, but instead sold their homes to unwitting investors.
Vito Grippo, 58, of Jackson, was sentenced to 10 years in state prison by Superior Court Stuart Peim in Union County. He was also ordered to pay full restitution to his victims. He pleaded guilty on Feb. 27, 2013 to a criminal accusation charging him with second-degree theft by failure to make required disposition of property received and third-degree money laundering.
Grippo’s son, Frederick P. Grippo, 32, of Old Bridge, was sentenced today to four years in state prison by Superior Court Judge William A. Daniel in Union County. He was ordered to pay $24,681 in fines. The son pleaded guilty on Jan. 23, 2013 to a criminal accusation charging him with second-degree theft by deception.
“These men ruthlessly targeted homeowners who were struggling during the national housing crisis, surreptitiously selling off the homes of their victims and stealing a total of $1.3 million in equity the homeowners had accrued,” said Acting Attorney General Hoffman. “Let us be clear – financial predators of this type will face lengthy prison sentences.”
“We will continue to make combating financial fraud a top priority in order to protect New Jersey residents, who work hard for their homes and other investments and who cannot afford to fall victim to con artists like these defendants,” said Director Elie Honig of the Division of Criminal Justice.
Supervising Deputy Attorney General Francine S. Ehrenberg, Deputy Chief of the Financial & Computer Crimes Bureau, prosecuted the case with Deputy Attorney General Mark Kurzawa, who handled the guilty plea and sentencing hearings for the Division of Criminal Justice. The investigation was conducted by Supervising Deputy Attorney General Ehrenberg, Detective Eric Ludwick, retired Detective Martin Farrell and retired Sgt. Robert Walker.
The defendants were arrested on Sept. 27, 2012. Vito Grippo had an office in Holmdel and operated several companies, including Morgan Financial Equity Shares, Inc., Jandevar, LLC, and Vanick Holdings, LLC. In pleading guilty, Grippo admitted that between Feb. 14, 2008 and Jan. 7, 2010, he stole $1.3 million by soliciting 12 financially distressed homeowners, saying he could rescue them from foreclosure and fix their credit rating by transferring title to their homes temporarily to a company called Morgan Financial.
The state’s investigation revealed that Grippo misrepresented that the homeowner would retain an 80 to 90 percent interest in the home, while Morgan Financial and an investor would share the remaining 10 to 20 percent interest. Vito Grippo told the homeowners to make their monthly mortgage payments to Morgan Financial, and Morgan would pay the lender, reducing their payments over time and giving them back full title to their homes in a year. He later sent letters to the homeowners telling them their mortgage payments had greatly increased.
Vito Grippo also admitted that he solicited investors who were led to believe that they would be investing through Morgan Financial in income-generating rental properties. The investors did not know that they were actually buying the homes outright. He misused the identities of the investors to file fraudulent mortgage applications to purchase the homes.
In pleading guilty, Frederick Grippo, who was a loan broker, admitted that he submitted fraudulent applications in order to further the scheme. The defendants created and submitted false documents for investors, including W-2 forms and bank statements, and falsely asserted that the investors planned to live in the homes as their primary residences. Vito Grippo had the original homeowners and the investors sign documents without giving them time to ascertain what they were signing.
Vito Grippo admitted to his role in the scheme in connection with 12 homes in Elizabeth, N.J., Brooklyn, N.Y. (3 homes), Jersey City, N.J., Staten Island, N.Y. (2 homes), Rutherford, N.J., Monroe, N.J., Somerville, N.J., Mine Hill, N.J., and Cambria Heights, N.Y. The investigation determined that he submitted fraudulent loan applications to obtain a total of more than $4.5 million to purchase the homes. Vito Grippo in turn stole more than $1.3 million in loan proceeds that should have been disbursed to the original homeowners as equity at closing. He diverted those funds into his companies’ bank accounts in order to launder the money. The investigation determined that he then disbursed the funds to himself and other co-conspirators. Frederick Grippo was involved in seven of the fraudulent loan applications and received checks from Morgan Financial for his participation in the fraud. Although Vito Grippo made some mortgage payments on the loans in the names of the investors, all of the homes ultimately fell into foreclosure. The original homeowners lost the properties and the investors’ credit ratings were ruined.