On Thursday, January 25, 2024, the Supreme Court of New Jersey issued a corrected order suspending attorney Martin David Eagan from practicing law for two years for his involvement in a bank fraud scheme.
The case is entitled “In the Matter of Martin David Eagan,” with case no. 088682.
The charges cited New Jersey Rules of Professional Conduct 1.15(a), 8.4(b), and 8.4(c), which states:
Knowing misappropriation of escrow funds.
Committing a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer.
Engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.
The Rules of Professional Conduct can be found here.
According to court documents, Eagan pleaded guilty in December 2021 in federal court to one count of conspiracy to commit bank fraud for his participation in a criminal conspiracy from 2007 to 2010 that fraudulently obtained reverse mortgages through Federal Housing Administration programs. In these types of mortgages, elderly homeowners can convert equity in their homes into cash but are not obligated to repay the loan until they pass away or sell the home.
The scheme involved preparing fraudulent home appraisals and false HUD-1 settlement statements to conceal from lenders that loan proceeds were being funneled to co-conspirators instead of being used for home renovations as intended. As the closing attorney, Eagan submitted false HUD-1 forms that disguised the improper disbursement of funds. He admitted preparing two versions of forms – one for the lenders stating funds would go to homeowners, and a concealed version showing his co-conspirators would receive the money instead.
In its January 2024 corrected order, the Supreme Court reduced Eagan’s discipline from disbarment, which had been recommended in October 2023 by the Disciplinary Review Board. The Board found Eagan’s crimes violated state ethics rules regarding dishonesty, fraud, and knowing misappropriation of escrow funds. While suspending him for two years rather than disbarring him, the Court also required Eagan to make full restitution of over $578,000 to the victims of the fraud and to regularly update the Attorney Ethics Office on his progress until the amount is paid off.
The Disposition states:
“It is ORDERED that Martin David Eagan be suspended from the practice of law for a period of two years, and until further order of the Court, effective immediately,”
According to lawyersjustia.com, Mr. Eagan acquired his law license in New Jersey in 1998.
A copy of the original filing can be found here.
