Morristown Attorney Admits To Defrauding Elderly Homeowners

MORRISTOWN, NJ — A Morristown attorney admitted in federal court Friday to participating in a reverse-mortgage fraud scheme that exploited elderly homeowners. Martin D. Eagan faces up to 30 years in prison and a fine of up to $1 million after pleading guilty to one count of conspiracy to commit bank fraud.

Sentencing is scheduled for April 14.

Eagan — principal of the Martin D. Eagan Law Firm — had a practice in Morristown that primarily focused on real estate transactions, such as loan originations, reverse mortgages and the refinancing of residential homes.

From 2007-2010, Eagan — acting as a settlement agent — was required to comply with instructions established by financial institutions that provided loans to borrowers. As part of the lending process, Eagan had to generate and certify HUD-1 settlement statements that he submitted to lenders.

The HUD-1 settlement statement itemized the receipt and disbursement of all funds for each real estate closing. HUD-1 settlement statements were required to be approved by a lender before a settlement agent could disburse funds. The disbursement of funds had to mirror the representations on the lender-approved HUD-1.

Eagan and his conspirators submitted fraudulent documentation to lenders to persuade them to approve and fund reverse mortgages and the refinancing of existing mortgages, according to federal authorities.

The fraudulent documentation submitted included the false HUD-1s that concealed from lenders the fact that disbursements of loan proceeds went to co-conspirators, or entities the conspirators owned or controlled, and false appraisals that overstated the value of homes.

Court documents name three co-conspirators, who were not named as defendants, including:

• Philip Puccio, Jr., a loan officer at two mortgage-brokerage firms that had a financial interest in several home repair and remodeling companies
• Rafael Peralta, who also had a financial interest in several home repair and remodeling companies
• Joseph Soprano, an unlicensed real estate appraiser

Thanks for reading. Have a news tip? Email josh.bakan@patch.com. Subscribe to your local Patch newsletter and follow the Morristown Patch Facebook page.