NEWARK, NJ — Five individuals were arrested March 20 and charged with using phony money orders, cashier’s checks, receipts and other fabricated documents to fraudulently discharge mortgages, student loans and other financial obligations, U.S. Attorney Craig Carpenito announced.
Melissa Reynolds, 42, of Elizabeth, is charged by complaint with three counts of conspiracy to commit bank and mail fraud, two counts of bank fraud, one count of mail fraud, one count of conspiracy to commit mail fraud, and one count of making false statements to the United States. Germaine King, 40, also of Elizabeth, is charged with one count of conspiracy to commit mail fraud, one count of mail fraud and one count of making false statements to the United States.
Henry Grady James IV, 43, of Hillside, and Arthur N. Martin III, of West Orange, are both charged with one count of conspiracy to commit bank and mail fraud. Daniel K. Dxrams, 39, of Maplewood, is charged with one count of conspiracy to commit mail fraud.
According to the complaint, Reynolds, King, James, Martin, Dxrams and others used fraudulent money orders, cashier’s checks and other fictitious documents to fraudulently discharge their debts or other obligations. In total, Reynolds and other conspirators caused and attempted to cause more than $3 million in losses, according to the U.S. attorney in a press release.
For example, in March 2013, Reynolds obtained a $417,276 mortgage from an entity referred to in the complaint as “Financial Institution One,” for the purchase of her Elizabeth residence. In May 2014, Reynolds allegedly mailed a fraudulent money order in the amount of $432,000 to Financial Institution One as a payoff on the mortgage. The money order falsely claimed to have been issued or processed by the IRS, according to the release. Financial Institution One’s mortgage business erroneously accepted the fraudulent payment and credited it as a payoff for her mortgage. Financial Institution One also mailed Reynolds an overpayment refund of $9,789. When Financial Institution One’s mortgage business filed a suit seeking to reinstate the fraudulently discharged mortgage, Reynolds and King reportedly continued to allege in court that the mortgage had been paid and even submitted a phony receipt for the bogus money order.
According to the complaint, Reynolds and others unsuccessfully used the same scheme to seek the discharge of other mortgages, including Reynolds’ second residence in Newark, the residence of an individual in Bowie, Md., James’ residence in Hillside and Martin’s residence in West Orange.
Reynolds also allegedly sought to fraudulently discharge more than $52,000 in student loans with fraudulent money orders and cashier’s checks. For example, on March 20, 2017, Reynolds allegedly sent a fraudulent cashier’s check in the amount $67,000 to the Department of Education’s processing company. The payment was rejected.
Reynolds, King, and Dxrams allegedly conspired to fraudulently obtain luxury cars in a similar fashion. For instance, Reynolds reportedly sent a bogus $101,000 cashier’s check to a finance company that enabled Dxrams to obtain a 2012 Bentley. Dxrams then allegedly sold the car to a third party for approximately $85,000 and then issued a bank check to King for approximately $25,000. The defendants also used this scheme in an effort to fraudulently obtain two Mercedes-Benz cars.
The bank fraud and bank fraud conspiracy charges are punishable by a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. The mail fraud and mail fraud conspiracy charges are punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The false statement charge is punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
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