Three men charged in mortgage fraud scheme

On July 21, detectives from the Monmouth County Prosecutor’s Office charged three men associated with Hawthorne Capital Corporation, a mortgage brokerage company previously operating out of locations in New York, Pennsylvania and Manalapan, with 11 counts of theft by failure to make required disposition of property and one count of identity theft, all second degree crimes.

The charges are the result of an investigation conducted by the prosecutor’s office into allegations that Hawthorne Capital Corporation had committed fraud, according to a press release.

Fredrick “Don” Tropeano, 44, of Holmdel, was arrested on July 21. Superior Court Judge Thomas F. Scully, sitting in Freehold, set bail for Tropeano at $3.6 million, cash only. Conditions of Tropeano’s bail include that Tropeano must surrender his passport and that a bail source hearing will be required before bail can be posted on his behalf.

John Kosta, 39, of Brooklyn, N.Y., was arrested in New York City with the assistance of the New York Police Department on July 21. Kosta is being held in custody in New York pending extradition to New Jersey.

Silvano Tropeano, 66, of Brooklyn, N.Y., was expected to surrender to authorities at the Monmouth County Prosecutor’s Office in Freehold on July 22.

According to the press release, the preliminary investigation revealed that numerous New Jersey residents used Hawthorne Capitol Corporation to refinance their mortgages. Following the refinances, however, the original mortgages held on the homeowners’ properties remained outstanding due to the conduct of Hawthorne Capital Corporation officials. As a result, the homeowners were ultimately left with two outstanding mortgages on their properties.

Silvano Tropeano is listed as the principal of Hawthorne Capital Corporation in the states of New Jersey and New York. In addition, Silvano Tropeano’s signature appears on the disbursement checks which were issued to Hawthorne Capital Corporation’s victims.

Silvano Tropeano’s son, Fredrick Tropeano, was responsible for the daily operations of Hawthorne Capital Corporation.

Kosta conducted the closings on the new mortgages and also notarized documents which were required for the closings, despite the fact that Kosta was not a notary or licensed to conduct closings, according to the prosecutor’s office.

As of the dates of the arrests, the investigation revealed that the initial mortgages of at least 11 homeowners remained outstanding, resulting in a cumulative outstanding debt of approximately $4 million.

The maximum potential custodial sentence for each of the second degree crimes the three men have been charged with is a state prison term of up to 10 years.

Notwithstanding these arrests, the investigation into the alleged criminal activities at Hawthorne Capital Corporation is continuing. Members of the public possessing information regarding criminal activity on the part of any of the individuals who were arrested as a result of this investigation or who have reason to believe they may be victims of fraud committed by Hawthorne Capital Corporation are encouraged to contact Detective A. Maestrey of the Monmouth County Prosecutor’s Office at 1-800-533-7443.