A homeowner conspirator was also sentenced in connection with the scheme
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A New York real estate broker has been sentenced to 21 months in prison for his role in a fraudulent loan scheme known as “shotgunning” that scammed multiple banks out of $3.5 million, according to the US Attorney’s Office for the District of New Jersey.
Michael Arroyo conspired with others to submit simultaneous loan applications using false information to obtain home equity lines of credit (HELOCs). In addition to the prison sentence, Arroyo was also sentenced to five years of supervised release.
Rafael Popoteur, a New Jersey homeowner, was sentenced to three years of supervised release, including one year of house arrest, for his role in the scheme. Arroyo and Popoteur previously pleaded guilty before US District Judge John Vazquez to charges of conspiracy to commit bank fraud.
Arroyo conspired with others to apply for two HELOCs from two banks using a New York residential property as collateral. The applications did not disclose that the property was already subject to senior liens that had not yet been recorded and that the property was already offered as collateral to another bank. Additionally, the equity in the property was far less than the amount of the HELOC loans that Arroyo and others applied for.
Eventually, the victim banks issued loans of more than $500,000. Portions of the proceeds were distributed to Arroyo and his co-conspirators. Eventually, the two HELOC loans went into default.
Popoteur was a client of Arroyo and another broker. He conspired with the brokers to apply for three HELOCs from multiple banks using a New Jersey property as collateral using false information about senior liens on the property, Popoteur’s income, and the property’s value.
The victim banks eventually issued loans to Popoteur in excess of $495,000. He disbursed portions of the proceeds to the real estate brokers and others. In 2014, Popoteur defaulted on all three HELOC loans.
