Posted On: May 29, 2009

Florida Mortgage Fraud Prosecutions: Part 10

Attorney Behr's mortgage fraud prosecutions series continues with the following excerpt:

ii. State

Dissimilar to legislation by the federal government, the State of Florida and other states have specific promulgated legislation to prosecute mortgage fraud. Florida has three different statutes regarding mortgage fraud. The first two statutes are more concerned with the actual mortgage transaction while the last revolves around the process in the obtainment of a mortgage. The first statute, § 877.10, Fla. Stat. (2009) prohibits “…any person to knowingly make, issue, deliver, or receive dual contracts, either written or oral…” for the “…same parcel of real property…” one with “…the true and actual purchase price and..” and another reflecting “…a purchase price in excess of the true and actual purchase price…” used to induce mortgage investors “…to make a loan commitment on such real property in reliance upon the stated inflated value…” is guilty of a second degree misdemeanor.94 The second statute, § 817.54, Fla. Stat. (2009) concerns any person who “…obtains any mortgage, mortgage note, promissory note, or other instrument evidencing a debt from any person or obtains the signature of any person…” “…by color or aid of fraudulent or false pretenses…” is “…guilty of a felony of the third degree…”95

Lastly, the third and final statute, § 817.545, Fla. Stat. (2009) was promulgated for material misrepresentations or omissions in the “mortgage lending process.”96 § 817.545, Fla. Stat. (2009) was instituted to combat what Florida and other states have determined to be a serious problem, residential mortgage fraud.97 To battle against this serious issue of residential mortgage fraud, states have enacted legislation normally termed residential mortgage fraud acts to punish two different degrees of conduct committed during the mortgage lending process. Generally, as in other states, violations of § 817.545, Fla. Stat. (2009) are third degree felonies, however, exposure to a second degree felony under this statute is possible if “…the loan value stated on documents used in the mortgage lending process exceeds $100,000…”98 This monetary value qualifier for what Florida’s legislature considers to be more abhorrent conduct is inconsistent with other states’ mortgage fraud statutes.


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Any use of the previous article requires written permission from Attorney Ralph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.

Posted On: May 28, 2009

Florida Mortgage Brokers Caught by SEC

Steven Shrago, a St. Petersburg mortgage broker, has been indicted among many other mortgage brokers in the area of disguising the risks of investing in mortgage backed securities. The original complaint filed against the defendants in the US District Court of Florida claimed that retirees were targeted by falsely marketed investments in derivatives of mortgage-backed securities. They were called "safe" and "suitable for retirees and others with conservative investment goals." The name of the company targeted by the charges was Brookstreet Securities Corp. Shrago was a registered representative and investment adviser for Wedbush Morgan Securities Inc. Many other residents of Florida were charged along with Shrago, many living in Boca Raton, Pompano Beach, Parkland, and Weston.

The original complaint filed by the SEC said that over $18 million in combined salaries and commissions were dispersed to the defendants while more than $36 million were suffered in losses by nearly 750 investors. As well as the SEC being involved in this matter, the Financial Industry Regulatory Authority filed charges in suit with the original charges against six other brokers formerly with the company in question. Mortgage fraud occurred here and is clearly the general charge in question.

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Posted On: May 27, 2009

South Florida Fire at synagogue Spikes Fears

In a blatant anti-Semitism attack on a Miami Beach synagogue, a man lit some wood pallets on fire resulting in a intense fire contained to the garage of the building. Officials say if they arrived minutes later, it could have ripped through the main area of the building. Not more than a week ago another anti-Semetic attack occurred at a local rabbi's house in Miami Beach. Miraculous in timing, a day earlier the synagogue where the fire took place had a camera installed. The camera got the arsonist smoking a cigarette yet reports show inconclusive evidence as to how he ignited the fire exactly. No arrests have been made yet according to a detective of the Miami Beach police department.

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Posted On: May 26, 2009

Florida Gang Members Arrested, Community Joyous

14 individuals of the Winter Garden-based Westside gang were apprehended recently in a gang arrest initiative created by local law enforcement in the Central Florida area drug unit. This particular gang was responsible for millions of dollars in value of drugs being shipped into the Central Florida area for over 10 years. Severe jail sentences loom over the heads of these criminals caught and for good reason. The gang has been linked to many cases of witness intimidation and money laundering by the use of several business fronts in the Winter Garden area. Drug sales were hidden at these discreet locations in order to cover their money trails and police heat. Bales upon bales of marijuana and cocaine were seized at several of the sites where arrests took place.

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Posted On: May 25, 2009

South Florida Jamaican Gets Mortgage Fraud Charges

Yvette Scott Patterson appeared in court recently in connections with a mortgage fraud operation. She fled the country to Jamaica, trying to avoid being detained. Her business front used fraudulent bank statement, fake employment verifications, stolen drivers licenses and other false documents in order to secure loans for the homes purchased by the company during the real estate boom.

The Magistrate in charge of her case will determine by the end of the week whether Patterson will be eligible for bond. Originally when Patterson was apprehended in Jamaica, she waved her right to fight extradition back to the United States.

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Posted On: May 22, 2009

Florida Drug Warrants and Seizures Spike in Polk County

Numerous drug growing houses were targeted in Polk County. Officials say these marijuana-cultivating houses are a problem for the community for a multitude of reasons. One obvious reason is the fact that they are growing points and primary centers where drugs enter the market. Secondly, the guns and cash usually found at these houses are a target for criminal activity besides the fact of the drug growing.

Many of the charges facing the criminals arrested in the entire operation ranged from trafficking in cannabis and cultivation of cannabis to maintaining a dwelling for drug trafficking and possession of drug paraphernalia.

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Posted On: May 21, 2009

Florida at the Center of a Cocaine Ring

Dennis A. Bell, Jr., 28, has been charged with conspiracy to traffic cocaine from Florida to London. He will face up to 30 years in prison, six years of supervised release, a maximum fine of $2 million and a required payment of $100 at the close of the proceedings. By pleading guilty to the charges, as a first time offender, he got one of the charges waived and the first two pleaded out. The right to vote will no longer be something Mr. Bell can do. Oh, boo hoo. Bell along with the 2 other conspirators were arrested by London Police last May. Bell was the only one of the three with a valid driver license.

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Posted On: May 20, 2009

Florida Attorney Discusses Penalties on Bullies

After an incident at a middle school in Florida where a 13 year old was raped, critics and lawyers say the laws have been softened regarding bullying. The Jeffrey Johnston Stand Up for All Students Act requires schools in Florida to establish concrete policies to discourage bullying in person and online or risk losing state funding. Lawyers to the raped individual aforementioned have claimed that if the law on the books had been enforced in the school, the incident would not have even occurred.

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Posted On: May 19, 2009

Mortgage Fraud Florida and SEC Poised to Indict

Angelo Mozilo is in hot water with mortgage fraud charges and civil lawsuits in 4 states, Florida included. Mozilo's Countrywide Financial is just one of the many mortgage brokerages under fire for profiting and conductive illegal activity during the recently devastating boom and bust. Last July, Bank of America, for $2.5 billion, bought Countrywide with Mozilo leaving soon after the completion of the deal.

A white collar offense can also lead to civil lawsuits filed by the government or the persons who were allegedly victimized by the crime. Unlike in a criminal case, the accused in a civil lawsuit does not have the right to remain silent, and they may be obligated to testify at their own trial. An attorney will not be appointed for them if they cannot afford one on their own.

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Posted On: May 18, 2009

Mortgage Fraud and Florida Prosecution: Part 9

Attorney Behr's mortgage fraud prosecutions series continues with the following excerpt:


18 U.S.C. § 2314 Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting


Under this statute, a person who enables assists or intends to enable property with a value of $5,000.00 or more into interstate commerce or foreign commerce by a scheme enabled through the use of material misrepresentations could be convicted under the statute.89

In United States v. Grintjes, 237 F.3d 876, 877 (7th Cir. 2001), the defendant a mortgage broker and his co-defendant Thomas Younk, a client who owned a real estate company allegedly obtained “…inflated appraisals of properties, use the inflated appraisals to obtain mortgages, purchase the properties for significantly less than the amount of the mortgage, and pocket the rest of the loan.”90 The defendant was indicted for “…aiding and abetting a fraudulent scheme involving the interstate transfer of funds… ”91 “Grintjes testified that he never independently inspected the properties Younk sought to finance, nor did he ever verify the appraisals.”92 He also testified that it was not uncommon in the mortgage broker industry not to inspect verify the appraisals.93

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Any use of the previous article requires written permission from AttorneyRalph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.

Posted On: May 15, 2009

Florida DUI Family Awarded $6.2 Million

In an unprecedented law suit ruling, Mary Taylor Christensen has been ordered by the courts to pay $6.2 million to the family of the victims in her drunk driving hit-and-run incident. In 2005, Christensen drank too much, took painkillers, hopped behind the wheel and ended up slamming into a car on the side of I-95 belonging to Thomas Bowen, who was instantly killed as he changed a flat tire. Christensen has been serving an 11.5 year sentence for the vehicular manslaughter and will now pay a massive amount of money in restitution for her crime.

Driving under the influence is a deadly motor vehicle crime that costs many people their lives, physically, financially, and in their freedom. Drinking and driving should already be a definite 'no' activity and must be seen in light of the damage it creates and the wide ripple effect that it creates.

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Posted On: May 14, 2009

Florida Prosecution of Mortgage Frauds by Criminal Lawyer Ralph Behr: Part 8

South Florida Criminal Defense Lawyer Blog is proud to present the next installment of Attorney Behr's mortgage fraud prosecutions series:


18 U.S.C. §1956 Laundering of monetary instruments

&

18 U.S.C. §1957 Engaging in monetary transactions in property

derived from specified unlawful activity


Both statutes essentially have the same purpose of preventing persons from legitimizing proceeds obtained illegally although there are differences. 18 U.S.C. § 1956, is concerned with any financial transaction concerning proceeds of a “specified unlawful activity”73 whenever action is focused to keep the criminal activity from being discovered, or to hide the source or current possessor of the funds, or to avoid the mandatory disclosures under the Bank Secrecy Act under Title 31 U.S.C.74 Conversely, provisions of 18 U.S.C. § 1957 is applicable if a person “…knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity…”75

In United States v. Moncrief, 133 Fed.Appx. 924 (5th Cir. 2004), both of these statutes were instituted in a case which the government claimed to be “…the largest mortgage-loan-fraud operation ever to be prosecuted.”76 The case involved Meis Enterprises which was owned and operated by the Meis family.77 Mei Enterprises was a conglomeration of several businesses operated by members of the Mei family.78 Mei Enterprises operated a construction company and several real estate companies.79 Although the assortment of companies had differing bank accounts and officers in charge, Mei Enterprises “…operated out of one common office.”80

The alleged end result of the mortgage fraud scheme was to collect “…large amounts of cash by inducing mortgage lenders to provide the Meis with loans that were $50,000 to $80,000…” over what “…it cost the Meis to purchase the real estate that served as the collateral for the loan.”81 In order to obtain the loans, “…the Meis orchestrated sham real estate transactions in which the Meis would appear to sell a particular property, which…” would overlap “…with actual sales in which the Meis would purchase, for the first time, the very same property.”82 Purportedly, the Meis first would find a property for sale and “…acting through one of their realty companies such as Hathaway Properties, would contract to purchase the property from its owner.”83

Third parties or straw buyer would serve as a temporary purchaser usually Frank Mei Sr. to complete “…a parallel sham transaction that would be used to obtain an inflated loan.”84 Mortgage brokers in one of the Mei Enterprises would falsify employment and income information on loan application to lenders.85 Eventually, Moncrief, a residential real estate appraiser became involved in the Mei scheme.86 Allegedly, Moncrief used the Mei’s formula for over inflating the value of selected properties and “…was involved in more straw buyer transactions than any other appraiser that the Meis use…”87 which exposed him to the money laundering violations.88

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Any use of the previous article requires written permission from Ralph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.

Posted On: May 13, 2009

Florida Prescription Drugs Get Hit By Law Enforcement

Last week, Indian River County Sheriff Deryl Loar implemented a drug task force on the highways. Many patrol cars were assigned to their stretch of highway, pulling over vehicles that sped or had other minor traffic violations in hope of discovering illegal drugs or other criminal activity. Of the cars pulled, surprisingly many had drugs on them or were wanted on warrants. One car was a rental car, driven by a suspended license driver, headed to Georgia, with marijuana in the car. Others involved one driver having numerous pain-killer scripts from travelling all across South Florida for doctors and their signatures to write off drugs like Oxycontin, Percocet, and Vicotin. The law enforcement agency in this article had felt like they took a chunk of crime off the streets and done well in one days simple work.

Prescription pills used illegally or in possession by those without prescription is a felony in most if not all cases and are dealt aggressively by state prosecutors. Trafficking amounts can be as low as one pill in certain cases.

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Posted On: May 12, 2009

South Florida Mortgage Fraud Prosecution by Ralph Behr: Part 8

The next installment of Attorney Behr's mortgage fraud prosecutions series:


18 U.S.C. §1956 Laundering of monetary instruments

&

18 U.S.C. §1957 Engaging in monetary transactions in property

derived from specified unlawful activity

Both statutes essentially have the same purpose of preventing persons from legitimizing proceeds obtained illegally although there are differences. 18 U.S.C. § 1956, is concerned with any financial transaction concerning proceeds of a “specified unlawful activity”73 whenever action is focused to keep the criminal activity from being discovered, or to hide the source or current possessor of the funds, or to avoid the mandatory disclosures under the Bank Secrecy Act under Title 31 U.S.C.74 Conversely, provisions of 18 U.S.C. § 1957 is applicable if a person “…knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity…”75

In United States v. Moncrief, 133 Fed.Appx. 924 (5th Cir. 2004), both of these statutes were instituted in a case which the government claimed to be “…the largest mortgage-loan-fraud operation ever to be prosecuted.”76 The case involved Meis Enterprises which was owned and operated by the Meis family.77 Mei Enterprises was a conglomeration of several businesses operated by members of the Mei family.78 Mei Enterprises operated a construction company and several real estate companies.79 Although the assortment of companies had differing bank accounts and officers in charge, Mei Enterprises “…operated out of one common office.”80

The alleged end result of the mortgage fraud scheme was to collect “…large amounts of cash by inducing mortgage lenders to provide the Meis with loans that were $50,000 to $80,000…” over what “…it cost the Meis to purchase the real estate that served as the collateral for the loan.”81 In order to obtain the loans, “…the Meis orchestrated sham real estate transactions in which the Meis would appear to sell a particular property, which…” would overlap “…with actual sales in which the Meis would purchase, for the first time, the very same property.”82 Purportedly, the Meis first would find a property for sale and “…acting through one of their realty companies such as Hathaway Properties, would contract to purchase the property from its owner.”83

Third parties or straw buyer would serve as a temporary purchaser usually Frank Mei Sr. to complete “…a parallel sham transaction that would be used to obtain an inflated loan.”84 Mortgage brokers in one of the Mei Enterprises would falsify employment and income information on loan application to lenders.85 Eventually, Moncrief, a residential real estate appraiser became involved in the Mei scheme.86 Allegedly, Moncrief used the Mei’s formula for over inflating the value of selected properties and “…was involved in more straw buyer transactions than any other appraiser that the Meis use…”87 which exposed him to the money laundering violations.88

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Any use of the previous article requires written permission from Ralph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.

Posted On: May 11, 2009

Florida Prosecution of Mortgage Frauds by Criminal Lawyer Ralph Behr: Part 7

South Florida Criminal Defense Lawyer Blog is proud to present the next installment of Attorney Behr's mortgage fraud prosecutions series:


18 U.S.C. §1344 Bank Fraud

Persons who knowingly executes or makes an attempt to execute a scheme or ploy to “…defraud a financial institution; or to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution by means of false or fraudulent pretenses, representations, or promises…” may be convicted under this statute.65

In United States v. Walsh, 75 F.3d 1 (1st Cir. 1996), the defendant was under indictment for a scheme allegedly carried out “…by directing his employees to obtain 29 specific loans through the use of deceptions so that customers could purchase condominiums from Walsh and his associates.”66 The defendant along with other investors “…purchased apartment buildings or complexes, converted the property into condominiums, and sold the condominiums to customers, using the unit sales to pay off the acquisition financing.67 The defendant also usually served as a trustee representative and legal counsel for a trust set up to acquire the buildings.68 “During 1986, sales of units in one of the projects started to fall behind schedule and the trust began to have difficulty repaying its acquisition loan.”69 The defendant subsequently discovered a bank “…made mortgage loans available rapidly-with no verification of income, assets or down payments-but the loans required a twenty percent down payment and secondary financing was prohibited.”70

Along with the first failing projects, others followed suit and the defendant instructed his employees to arrange loans “…for unit purchasers and to falsify documents submitted to…” the bank “…to conceal the existence of secondary financing (and in some cases third mortgages as well).”71 Loans were eventually defaulted on and the bank “…incurred substantial losses.”72

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Any use of the previous article requires written permission from Ralph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.

Posted On: May 8, 2009

Florida Mortgage Fraud Criminals Running Rampant

Victor Thomas Clavizzao, 46, has been sentenced to 5 years in prison on convictions of conspiring to commit mortgage fraud. The court also ordered Clavizzao to pay $2 million in restitution and to forfeit an additional $6 million. Clavizzao had entered a guilty plea on September 23, 2009. Court documents stated that Clavizzao worked as a mortgage broker in the purchase of 13 real estate properties. He conspired to submit false and fraudulent information to a variety of lenders in the hopes of inducing the lenders to fund bad loans.Clavizzao's co-defendant, a Pinellas property flipper who procured bogus loans with Clavizzao's assistance, was sentenced earlier by a US District judge to 13 months in prison in his actions related to the conspiracy.

Mortgage fraud is a popular charge being seen in the news these days. If you are involved in such an incident, do not forgo your rights to the state. Defend your rights in court with a lawyer that knows the law and that will fight for you.

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Posted On: May 7, 2009

White Collar Florida Crime Goes to Federal Courts

Huey Granderson of Millersport, Ohio was charged with three counts related to an insurance fraud ring which involved real estate. Granderson was the ringleader of this group that committed theft in upwards of $5 million from companies in the area. He pled guilty to partaking in corrupt activities, theft and failure to file an income tax return; all have been deemed felonies. According to his plea agreement, the other 14 dropped were lifted from his case. Granderson is set for sentencing at a later date although he can face up to 19 years in prison and a hefty fine.

White collar crime can be committed by a number of individuals, generally those with images like accountants, lawyers, doctors, business executives, stock brokers, and bankers. Real estate fraud comes under the grouping of white collar crimes. Penalties for a white collar crime conviction, as displayed in Granderson's instance, can include criminal forfeiture, payment of fines, supervised release, restitution, and imprisonment.

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Posted On: May 6, 2009

Florida Prosecution of Mortgage Frauds by Criminal Lawyer Ralph Behr: Part 6

Here is the next installment of Attorney Behr's mortgage fraud prosecutions series:


18 U.S.C. §225 Continuing financial crimes enterprise

Continuing financial crimes enterprise statue criminalizes any person that “…organizes, manages or supervise a continuing financial crimes enterprise; and receives $5,000,000.00 or more in gross receipts from such enterprise during any 24-month period…”48 The meaning of “…a continuing financial crimes enterprise…” is any combination of eleven other criminal violations found within the same United States Code title “…affecting a financial institution, committed by at least 4 persons acting in concert.”49

This statute was made use of in United States v. Lefkowitz, 125 F.3d 608 (8th Cir. 1997). “From 1984 to 1994, Lefkowitz was President of Cit-Equity Group, Inc. (CEG), a California corporation that formed real estate limited partnerships to build low and moderate-income housing.”50 Starting in 1987, “…CEG began concentrating on projects that would qualify limited partners for low-income housing tax credits…” from the federal government.51 Obtainment of these credits were had when investors built, rehabilitated or acquired “…buildings in which a prescribed percentage of the apartment units are occupied by low-income tenants.”52 Subsequently, the “…government allocates tax credits to the States, with at least ten percent reserved for ventures in which nonprofit organizations participate.”53 Following the federal allocation, individual states and local housing agencies would dispense “…the credits to specific projects.”54

Funds raised from limited partners were used for differing projects as equity, “…generally between one-quarter and one-third of the total project cost.”55 Specifically, after a building is completed, “…CEG’s management company lease out the apartment, the state housing agency release the allocated tax credits, remaining debts to the builder were paid, and…” lastly “…limited partners began receiving their annual tax credits.”56

“During the late 1980's, CEG's builders obtained construction loans to build the projects, while CEG obtained permanent financing to replace the construction loan once a building was completed.”57 Starting in 1990 construction loans became hard to obtain and CEG began marketing First Secured Mortgages (FSMs) to other investors.58 These FSM investors made loans to limited partnerships that owned by one or more of the projects “…with the expectation that CEG's permanent lenders would take out the FSM loans with long-term mortgages.59

“When Lefkowitz left CEG in May of 1994, properties in which limited partners and FSM investors had invested more than $80,000,000 were unbuilt, unfinished, or lost in foreclosure.”60 “Funds from limited partners and FSM investors were first deposited in an operating account for each particular investment.”61 However, “…Lefkowitz and CEG as general partners immediately transferred all investor funds to a central CEG account.”62 Once in this account these monies were misused by the company.63 The extent of the alleged scheme and the participation of the defendant’s general partners provided the evidence needed to convict the defendant of the crime of continuing financial crime enterprise statute, because “…banks invested a total of $1,120,000 in…” FSM loans.64

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Any use of the previous article requires written permission from Ralph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.

Posted On: May 5, 2009

Mortgage Fraud Criminal Gets The Book Thrown At Him

Inyang Amos was charged via a superseding indictment with 10 counts of mortgage fraud through interstate wire, one count of engaging in a monetary transaction involving criminally derived property and two counts of aggravated identity theft. He allegedly devised and executed the fraudulent scheme from 2003 through 2006 in which 15 residences were purchased and resulted in a loss totaling $400,000 to various mortgage lenders he worked with. Inyang would recruit others in order to have money lent to them by mortgage lenders and appearing to them as a person in the "real estate business." Single family homes were the primary target and promising financial terms lured in his victims. If found guilty of these charge, he faces a max of 20 years in prison on each count of mortgage fraud, 10 years for the transaction count and minimum of 2 years for each aggravated identity theft count. A Federal district court judge will be responsible for the sentencing.

A white collar offense can also lead to civil lawsuits filed by the government or the persons who were allegedly victimized by the crime. Unlike in a criminal case, the accused in a civil lawsuit does not have the right to remain silent, and they may be obligated to testify at their own trial. An attorney will not be appointed for them if they cannot afford one on their own.

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Posted On: May 4, 2009

Florida Crime Goes Down, According to FDLE

Incidents of major crime ticked up in 2008 over the previous year but were significantly down from 10 years ago, according to the Florida Department of Law Enforcement, which today released the annual statewide crime report. "The number one priority of government is to make our neighborhoods safe and secure for Floridians," Gov. Charlie Crist said in prepared statement included in the announcement. "Our state is committed to implementing the necessary tools and resources to deter criminal activity and protect the people."

The report also said that domestic violence offenses dropped by 1.8 percent compared with the previous year. Nonviolent crime, which includes burglary, larceny and motor vehicle theft, increased 1.7 percent, the report said.

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Posted On: May 1, 2009

Florida Prosecution of Mortgage Frauds by Criminal Lawyer Ralph Behr: Part 5

Further exposition of Attorney Behr's mortgage fraud prosecutions series:


18 U.S.C. § 1341 Frauds and swindles

&

18 U.S.C. § 1343 Fraud by wire, radio, or television

Also know as the mail and wire fraud statutes. These statutes explain any person “…having devised or intending to devise any scheme or…” ploy while making material misrepresentations in conjunction with the use of the United States Postal Service or the use of any electronic media format may be exposed to prosecution under these statutes.36

An example of both these statutes in action is outlined in the Seventh Federal Circuit case of United States v. Owens, 301 F.3d 521 (7th Cir. 2002). “A jury convicted real estate appraiser Reginald Owens of mail fraud and wire fraud for his part in a multi-million dollar real estate and mortgage fraud scheme.”37 The alleged “…scheme was a land “flip” scheme, which basically involved having people purchase distressed properties for cash and then immediately resell that same property at artificially-inflated prices.”38 One of the co-defendants, Brian Parr’s “…role in the scheme was to first identify the property he wanted to buy through realtors and by searching the Multiple Listing Services (“MLS”), a real estate computer database that showed properties for sale and the seller's listing price.”39 While arranging for the proper contracts for purchase of these properties, “…Parr would prepare to sell the property at an artificially-inflated price to a second buyer.”40 These sales mostly happened at the same time; however there were instances when the subsequent sale was performed prior to the property being contracted with the first purchaser.41

Second possible buyers were lured in with offers of “…no money down and cash back at closing.”42 “The second buyers, however, typically did not have jobs or bank accounts and thus could not have normally qualified for a mortgage.”43 In avoidance of this potential problem, “…several other co-schemers, including loan officer Tamira Smyth, created false documents to submit to the lender institutions.”44

Besides false documents, the mortgage brokers additionally worked with individual appraisers to make certain the appraisals synched up with the contract price of the subsequent sale to exploit Parr’s profits.45 The appraisers utilized inflated the value of the properties by leaving out critical pieces of information from their appraisal reports and the MLS and “…by comparing the sale house involved in the flip transaction to houses that were far superior.”46 “Parr then used the profits from each transaction to pay his co-schemers.”47


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Any use of the previous article requires written permission from Ralph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.