A mortgage fraud duo could get up to 15 years

Queens Village couple allegedly conned out of cash in home sale

Posted: Thursday, March 15, 2012 12:00 pm

Two men have been indicted on mortgage fraud charges and could face 15 years in prison after they allegedly took advantage of a Queens Village couple who was seeking to get out of debt and turned to them for help.

James Caston, 70, and his wife, Teresa, 53, entered into a verbal agreement to sell their house at 104-13 217 St. to real estate investor Jose Toral, 28, of Oakdale, LI, in May 2007, according to the Queens District Attorney’s office.

The deal was supposed to be 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 Caston’s planned to use the proceeds from the home’s sale — approximately $94,000 — which would be held in escrow, to pay off their debts, improve their credit rating and obtain a more favorable mortgage on their home before the title was returned to them.

But that’s not what occurred according to the Queens DA Richard Brown.

It is alleged that Toral and attorney Thomas Zacharia, 38, of Staten Island, who was disbarred in April 2008 as a result of an unrelated matter, arranged for only a portion of the homeowners’ debts to be paid off while retaining a major portion of the mortgage proceeds for themselves — $65,259. The property eventually went into default.

Toral and Zacharia have been charged with second- and third-degree grand larceny, second- and third-degree criminal possession of stolen property and first- and second-degree falsifying business records. Zacharia was also charged with fourth-degree criminal facilitation.

Toral was ordered held on $5,000 bail and must return to court on March 19, while Zacharia was released on his own recognizance and ordered to return to court on April 20.

There were two different contracts for the sale of the Castons’ house. One allegedly listed the purchase price as $444,140 with no down payment and a rider which gave Toral $50,000 from the sale, but this contract was never submitted to CitiMortgage, the lending institution, nor were the rider terms explained to the Castons by Zacharia, the DA said.

The actual contract listed the price of the house at $504,700 with a down payment of $40,000 to be held in the escrow account of Toral’s attorney, the law firm of Marschhausen and Fitzpatrick.

The DA alleges that:

Toral told CitiMortgage that the property would be his primary residence when he knew that the agreement’s stated intention was to have the Castons remain in possession of the property.

The deed to the house was transferred to Toral on Aug. 14, 2007. The Castons were represented at the closing by Zacharia and Toral was represented by Marschhausen and Fitzpatrick.

The HUD settlement statement indicated that approximately $93,537 was due to the Castons upon sale of the property. On August 15, 2007, CitiMortgage’s closing attorney wrote a check for $42,931.89 to Zacharia as attorney for the Castons and allegedly deposited it into Zacharia’s escrow account.

On August 23, 2007, he withdrew the money in the form of a bank check made payable to a company owned by Toral called JT Marketing, and the funds were deposited into the firm’s account.

On Sept. 24, 2007, a check for $51,128 made payable to Zacharia was written on the account of Accurate Title Service, Inc., with a memo stating that it was the release of James Caston’s escrow funds.

Toral then 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 payment to Toral until March 1, 2008, when he stopped making additional mortgage payments. The property then went into foreclosure.

Slummin'

Friday, March 16, 2012