Englewood man admits role in property-flipping scheme

An Englewood man admitted his role Tuesday in a scheme that defrauded banks of more than $1.5 million and forced several unsuspecting home buyers into foreclosure, authorities said.

David Wynn, 45, pleaded guilty in federal court in Newark to a single count of conspiracy to commit wire fraud, U.S. Attorney Paul J. Fishman said.

Wynn, a loan officer, and another man, Michael Kaufman, 43, the CEO of a Bloomfield real estate investment firm called Home Start America Inc., ran a three-year scheme to sell run-down homes in Paterson, Newark and elsewhere, later “flipping” them at higher prices to buyers with limited financial resources, Fishman said.

The scheme reaped quick profits for Wynn and Kaufman, of Reading, Pa., but led to a number of foreclosures when buyers — many of whom had been encouraged by Wynn to falsify their loan applications — failed to make timely payments, prosecutors said.

The buyers were also told that they could purchase the properties without a down payment and without paying closing costs, prosecutors said.

Wynn was also accused of inflating many of the buyers’ incomes and assets on the loan applications, unbeknownst to the lending institutions. The scheme netted the two men hundreds of thousands of dollars in profits, Fishman said.

Kaufman had previously pleaded guilty Monday to one count of conspiracy to commit wire fraud. Both men face a maximum of 20 years in prison and fines of up to $250,000 each.