Mortgage Fraud Scheme Cheats Queens Couple

A Queens grand jury charged a real estate investor and an attorney this week for stealing more than $65,000 in proceeds from a Queens couple after the sale of their house.

Queens District Attorney Richard Brown’s office identified the defendants as real estate investor Jose Toral, 28, of Oakdale, Long Island, and attorney Thomas Zacharia, 38, of Staten Island. Brown says the men took unfair advantage of a couple who were in financial distress and forced to sell their home.

Zacharia, who was disbarred in April 2008 as a result of an unrelated matter, and Toral were arraigned before Queens Supreme Court Justice Fernando M. Camacho on a seven-count indictment charging them with second- and third-degree grand larceny, second- and third-degree criminal possession of stolen property and first- and second-degree falsifying
business records. Additionally, Zacharia was charged with fourth-degree criminal facilitation. Toral was ordered held on $5,000 bail and to return to court on March 19, and Zacharia was released on his own recognizance and ordered to return to court on April 20. If convicted, they each face up to 15 years in prison.

According to Brown’s office, homeowners James Caston, 70, and his wife, Teresa, 53, were instructed to put the title to their home in the name of one of the defendants for one year. During that time the Castons were supposed to pay off their debts with the mortgage proceeds, improve their credit rating and then seek out a more favorable mortgage rate on the home before title was returned to them.

Allegedly, the defendants paid off only a portion of the Castons’ debts, retaining the bulk of the money from the mortgage for themselves; eventually the property went into mortgage default.

The couple had been faced with mounting debt, and verbally agreed in May 2007 to sell their home, at 104-13 217th Street in Queens Village, to Toral with the understanding that they could remain in their home, make monthly mortgage payments to him, and then after a year be allowed to repurchase the property. The verbal agreement also provided that the proceeds from the home’s sale – about $94,000 – would be held in escrow and used to pay the Castons’ debts.
It is also alleged that two different contracts of sale were executed for the sale of the Castons’ property.

One contract, shown to the couple, listed a purchase price of $444,140 with no down payment and a rider which allocated $50,000 from the sale proceeds to Toral. This contract was never shown to CitiMortgage

The other contract of sale, that was submitted to CitiMortgage, provided for a purchase price of $504,700 and a down payment of $40,000 to be held in the escrow account of Toral’s attorney, the law firm of Marschhausen and Fitzpatrick.
Toral allegedly represented to CitiMortgage that the property would be his primary residence when, in fact, the Castons were always to remain in possession of the property.A Housing and Urban Development (HUD) settlement statement indicated that approximately $93,537 was due to the Castons upon sale of the property. While CitiMortgage did make the appropriate payments at the right times, Torel and Zacharia would simply move the funds from the escrow account into a different account, that of a company owned by Torel, JT Marketing.

In total, Toral is alleged to have received approximately $94,059.89 from the sale of the property. He arranged to have a debt management company pay a portion of the Castons’ debts ($28,800), leaving him with a balance of $65,259.89.
Following the closing, the Castons made monthly cash payments to Toral. Beginning on March 1, 2008, Toral allegedly failed to make additional mortgage payments and, in return, the Castons stopped paying Toral. A foreclosure action was then commenced on the property.

Compiled by The Forum Staff


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