American Macro Growth under investigation
By PRASHANT GOPAL
2/14/2006

Federal investigators say a recently disbanded mortgage brokerage firm helped dozens of Bergen County homeowners cheat financial institutions and secure up to $100 million in loans.

The firm, American Macro Growth Mortgage, also known as AMG Mortgage, had offices in Palisades Park, Englewood and throughout North Jersey until it "concluded business" in late November 2005, said John Paige, supervisory special agent for the FBI in West Paterson. The FBI is trying to track down employees of the firm, who are believed to have disappeared with a fortune they made in commissions.

Paige, who would not identify the brokers, said he could not say whether criminal charges have been filed.

According to the FBI, the brokers would help a homeowner secure home equity loans from numerous lenders on the same property. A borrower with, say, $300,000 of equity in a home was able to borrow up to $2.2 million, he said.

A lawyer for some of the homeowners said they borrowed in good faith and repaid their debts on schedule. But the borrowers have still attracted the attention of investigators since they signed on their applications that they were seeking only one loan per home.

"You sign a document saying everything you say is true," Paige said. "Is getting loans close to 10 times on the same piece of property misspeaking?"

The fraud involved as many as 100 borrowers throughout the Bergen County area and between $40 million and $100 million in loans, Paige said.

He said the banks told the FBI about the scam. He declined to name the banks, which he said are some of the "largest financial institutions in the country."

Some homeowners and small-business owners who collected the money have come forward and are negotiating with federal authorities, according to Matthew Jeon, a Fort Lee lawyer who says he represents more than a dozen borrowers.

Jeon says the brokers were Korean immigrants who "preyed on their own." The mortgage company had a strong incentive to convince clients to borrow much more than they needed because they charged them a fee of 6 percent to 7 percent, Jeon said.

In most cases, the borrowers could have obtained home equity loans with much smaller commissions.

Jeon added that some of his clients had so much money after taking out the loans that they gave some to AMG to invest, but those funds are now missing.

"In the immigrant community, you rely on the people who were here before you," Jeon said. "They relied on these brokers who said, 'It's OK as long as you pay it back.'"

The borrowers collected both home and business loans and used some of the money to buy new homes and invest in businesses. Some borrowers left most of the money in the bank. "Some people had more money than they knew what to do with," Jeon said.

Most borrowers intended to pay back the loans and planned to use the money they made with the investments to cover the interest, he said.

"A lot of people thought since the banks approved it that the banks were giving them money to spend and invest," Jeon said. "They didn't think they were doing anything illegal and didn't read the fine print on the documents."


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