Newark, N.J. – (Feb. 25, 2009) A Clifton man pleaded guilty today to wire fraud conspiracy in connection
with a mortgage fraud and property-flipping scheme involving rental properties in
Paterson, Acting U.S. Attorney Ralph J. Marra, Jr. announced.
Norman Barna, 69, who owned and sold two- and three-family rental properties in
Paterson, pleaded guilty before U.S. District Judge Jose L. Linares to one count of wire
fraud conspiracy, which carries a maximum statutory penalty of five years in prison and a
fine of $250,000.
Under the advisory U.S. Sentencing Guidelines, Barna faces an actual sentencing range
of between 12 and 18 months in prison. He also will have to pay restitution to the
victims. The guidelines are advisory only, and Judge Linares has discretion in imposing a
sentence within, above or below the guidelines range.
Barna admitted that he had an arrangement with Michael Eliasof, a former Paramus real
estate agent, to sell properties in Paterson under which Barna would receive a $25,000
profit for each property sold. Barna also admitted that some of these properties were in
poor condition and that the sales prices for these properties generally were higher than the
properties were worth.
Barna added that at the closings of these transactions, which occurred at the law office of
W.C., who is now deceased and was then a municipal judge in Garfield, Eliasof received
substantially more money than real estate agents typically receive for such transactions.
In connection with these closings, Barna admitted signing HUD-1 settlement statements
containing false representations.
Barna also stated that he knew that some of these real estate transactions were financed
by US Mortgage Corp., through loan officer Gerald Carti. According to Barna, Eliasof
later told him that a woman at US Mortgage was making Carti refinance those loans.
Carti pleaded guilty yesterday. For that news release, follow this link to yesterday’s date:
Barna’s guilty plea is the latest step in an investigation by the U.S. Department of
Housing and Urban Development Office of Inspector General (HUD-OIG), the FBI, the
U.S. Postal Inspection Service and the IRS Criminal Investigations Division into
fraudulent Federal Housing Administration-insured and conventional mortgage loans
originated by various New Jersey mortgage companies, including US Mortgage and
United Home Mortgage. The investigation has resulted in 13 guilty pleas from New
Jersey residents, including Eliasof, Carti and Barna.
Marra credited Special Agents of HUD-OIG, under the direction of Special Agent in
Charge Rene Febles; Postal Inspectors of the U.S. Postal Inspection Service, under the
direction of Postal Inspector In Charge David L. Collins; Special Agents of the IRS
Criminal Investigation Division, under the direction of Special Agent in Charge William
P. Offord; and Special Agents of the FBI, under the direction of Special Agent in Charge
Weysan Dun, for their tireless investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorney Mark E. Coyne of the U.S.
Attorney’s Commercial Crimes Unit.
SOURCE: United State Department of Justice -- District of New Jersey