By Ron Leir
Observer Correspondent
KEARNY –
John Leadbeater, a former Kearny Town Councilman and a current member of the Board of Education, will be going on trial later this year for his alleged role in a $13 million mortgage fraud enterprise.
Leadbeater’s Jersey City attorney Thomas Cammarata told The Observer last week that the federal government has assigned a trial date of Dec. 1 for his client.
A federal indictment unsealed March 22, 2013, charges Leadbeater, 54, of Kearny, and Daniel Cardillo, 49, of Wildwood, with conspiracy to commit wire fraud. Leadbeater is additionally charged with conspiracy to commit money laundering.
Cammarata said that his client is innocent of the charges and expects to demonstrate that the accusations are false during the trial which will take place in Camden Federal Court.
The U.S. Attorney’s Office will set out to prove that Leadbeater and Cardillo were involved in a scheme that used fake documents and “straw buyers” to “make illegal profits on overbuilt condos at the Jersey shore.”
The indictment alleges that Leadbeater and several co-conspirators – including Angela Celli, 42, of Somerset, Mass.; Robert Horton, 37, of Nashport, Ohio; and Justin Spradley, 35, of Cincinnati, all of whom have previously entered guilty pleas in connection with the scheme – and others — recruited straw buyers, including Cardillo, to purchase oceanfront condos overbuilt by financially distressed developers in Wildwood and Wildwood Crest between May 2006 and August 2011.
The indictment says Leadbeater and Cardillo illegally obtained mortgage loans for the straw buyers “who had good credit scores but lacked the financial resources to qualify for mortgage loans” by using fraudulent loan applications and other phony supporting documents, thereby causing $13 million in “losses to various lenders.”
The defendants allegedly “transmitted by means of wire communications in interstate commerce certain writings, signs, signals, pictures and sounds” to facilitate the scheme, the indictment says.
The government alleges that Leadbeater and his coconspirators told the straw buyers that “in exchange for purchasing the properties in their names,” they would avoid paying deposits or closing costs to acquire the properties, wouldn’t have to pay monthly mortgage fees, would receive an upfront payment after the closing for allowing their names and credit information to be used for the transactions and wouldn’t have to manage the properties because Leadbeater and others would maintain the properties, find renters, collect rent and make mortgage payments.
The government says the conspirators got mortgage loans for the straw buyers “through fraudulent loan applications by providing false information concerning the employment, income and assets of the straw purchasers” and “created false documents such as fake W-2 Forms, income tax returns, investment ‘statements’ and rental agreements to make the straw purchasers more creditworthy than [they] actually were in order to induce the lenders to make the loans.”
According to the indictment, the conspirators had fake documents prepared “that were supposed to accurately reflect the amounts of money due from the straw purchasers and to be paid to the sellers to close the sales of the properties” and “to falsely show that the straw purchasers brought their own funds to the closing when, in fact, [they] did not.”
And, the indictment alleges, the conspirators “took proceeds from the fraudulent mortgage loans by having funds wired or checks deposited into various accounts that they controlled [while] the straw purchasers … were paid a portion of the funds.”
Eleven of the condo properties involved in the alleged scheme were located in Wildwood, in the 200 block of E. Pine Ave., in the 600 block of W. Burke Ave., in the 4600 block of Niagra Ave., and in the 300 block of E. Poplar Ave.; and 15 properties were in Wildwood Crest, in the 400 block of E. Stanton Road, in the 200 block of W. Buttercup Road, in the 5600 block of Park Blvd., in the 100 block of W. Sweet Briar Road, in the 200 block of E. Denver Ave., in the 5500 block of Atlantic Ave., in the 400 block of E. Buttercup Road, and in the 400 block of Heather Road.
The indictment alleges that between May 2006 and March 26, 2008, Leadbeater and others engaged in “conspiracy to commit money laundering” by extracting proceeds from the fraud through wire transfers and checks to … Leadbeater and [two] co-conspirators who, in turn, transmitted a portion of these proceeds to the straw purchasers.”
If Leadbeater is convicted on the money laundering charge, the government will seek to compel Leadbeater to pay $2,961,518, “representing the amount of proceeds obtained as a result of the offense…” or, failing that, “to seek forfeiture of any other property of … Leadbeater” that will satisfy that amount sought.
Assistant U.S. Attorney Jacqueline M. Carle is representing the government in the case.
