US charges 5 with foreclosure scam in Philly area

AP News
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Posted: Dec 09, 2009 8:04 AM

Five people were charged with using a supposed mortgage-rescue program to steal nearly $15 million in home equity from homeowners facing foreclosure in suburban Philadelphia.

The federal indictment Tuesday accuses the owners of Axxium Mortgage, J&J Realty and two lawyers in the alleged scheme.

According to prosecutors, they defrauded at least 35 homeowners in Bucks and Montgomery counties by finding "investors" to buy their homes while the owners rented them back and tried to save money in hopes of repurchasing them.

Instead, the owners lost their homes _ and whatever equity they had in them, an amount that sometimes topped $100,000 and in one case reached $500,000, authorities said.

The defendants include Axxium co-owners Edward McCusker of New Hope and John Bariana of Mullica Hill, N.J.; McCusker's wife Jacqueline; and lawyers Jeffrey Bennett of Springfield and Stephen Doherty of Doylestown.

McCusker used forged documents to get mortgages in the name of the straw purchasers, and then steered any proceeds from the sale to the defendants, sometimes through shell companies, the indictment charges.

The closings were held at Bennett and Doherty's title company in Doylestown.

McCusker and Bariana obtained mortgages for 10 homes, while the defendants also recruited and paid others to act as straw purchasers, authorities said. Bariana and Jacqueline McCusker owned J&J Realty, charged with similar conduct.

The charges in the case mirror those in a related civil suit filed last year on behalf of some alleged victims against Doherty, Bennett and others.

Bariana's lawyer, Ronald DeSimone, declined comment. Lawyers for the others did not immediately return messages Tuesday, and a message left at the Bennett & Doherty law firm was not immediately returned.