09/09/2009

News / CEO Surrenders to FBI for $11 Million Mortgage Fraud Scheme

NEWARK, NJ—David Findel is best known for his purchase of exclusive seats at a local football stadium. Now, he will be known for another reason. Today, Special Agent In Charge Weysan Dun announced the surrender of Findel, the 44 year old President and CEO of Worldwide Financial Resources, on a single charge of wire fraud.

A criminal complaint filed today in Newark charges Findel, of Colts Neck, New Jersey, with submitting false documents to financial institutions in a mortgage reselling scheme. Findel’s actions caused those institutions to wire money to Findel’s company, Worldwide Financial Resources (herein referred to as “WFR”) located at 50 Route 9 North, Morganville, New Jersey. Originally started as a financial planning company, WFR had been expanded by Findel to include a variety of home mortgage services, to include mortgage origination and banking. This allowed WFR to both initiate and fund mortgages for its clients by borrowing money from a “warehouse lender”. To repay the lender, WFR would resell each home mortgage it originated in the secondary mortgage market at a profit.

Because of the housing crisis, WFR experienced a liquidity crisis in January 2008. That is when Findel perpetrated a scheme to defraud mortgage banks by reselling the same mortgages to multiple financial institutions, according to the criminal complaint. It is important to note that once WFR sold a mortgage, it relinquished any and all financial interest in that mortgage. But Findel would then create a second set of fraudulent mortgage documents (loan applications, promissory notes, closing sheets, settlement forms, etc.) and resell –for a second time, the same mortgage to a different secondary lender. Funds from the secondary lender’s account were wired through an escrow company to the account of WFR. Findel allegedly used those funds to pay corporate and personal expenses. The complaint alleges that Findel obtained more than $11 million from secondary lenders through his fraudulent mortgage transactions.

“This is a man who had it all,” said Weysan Dun. “Mr. Findel made this company what it was. He had the skill and savvy for this business. But what I find most remarkable is that despite his wealth and success, it simply wasn’t enough. Mr. Findel let greed beat him.”

Findel had an initial appearance this afternoon before Honorable Mark Falk, United States Magistrate Judge. Falk released Findel on $1 million secured bond. If convicted, Findel faces a maximum prison sentence of 20 years and $250,000 in fines. A criminal complaint is merely an accusation. Despite this accusation, every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

http://newark.fbi.gov/pressrel/2009/nk090809.htm

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