Articles Posted in White Collar Criminal Defense

Taylor, Bean & Whitaker halted all mortgage loan funding today in result of a federal investigation. Federal authorities had called the company to close loans which were insured by the Federal Housing Administration. In addition to the FHA suspending the firm, Ginnie Mae cut off Taylor, Bean & Whitaker from its mortgage-backed securities program. Mortgage fraud is running rampant in large-level organizations in today’s business age and its affecting consumers directly. The lender based out of Ocala did not submit a mandatory report which led to the investigation and eventual shutdown.

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Gideon Rechnitz currently faces two lawsuits of mortgage fraud in Sarasota County, including one by 71-year-old Yolanda Rodriguez. She claims that in 2006 Rechnitz improperly evicted her and her deaf brother from their home, which he acknowledged in a deposition was worth far more than the $150,000 Rodriguez owed on her mortgage. Rechnitz said in the fall that his foreclosure rescue business had slowed considerably in 2008 because it was harder to find people like Rodriguez with substantial equity. But as home­owners who got 100 percent financing now struggle to renegotiate their mortgage terms, state records show he recently started a new company called Loan Modification Enterprises.

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In conclusion of Attorney Ralph Behr’s personal thesis on mortgage fraud prosecution:

On the other hand, this defense would not be legally cognizable under § 817.545, Fla. Stat. (2009) and two other federal statutes aforementioned.115 § 817.545, Fla. Stat. (2009) concerning violations committed during the mortgage lending process do not require a person or entity to rely or to be injured by a defendant’s fraudulent activity it is enough that “..any material misstatement, misrepresentation, or omission…” is made “…with the intention that the misstatement, misrepresentation, or omission will be relied on…”116 This statute is more aligned with two other federal statutes punishing statements or omissions on applications or forms submitted to federally approved agencies that are in the business of extending credit, 18 U.S.C. § 1010 (2009) and 18 § U.S.C. 1014 (2009). The actual submittal of these forms or applications for loan or credit advances coupled with either the “…intent that such loan or advance of credit shall be offered to or accepted…”117 or “…for the purpose of influencing in any way the action of…” any federally approved agency in the business of extending credit118 would be sufficient for a conviction under either statute.

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§ 877.54, Fla. Stat. (2009) should be reduced to an attempt because the crime was not completed.108 The defendant reasoned the corporation “…was not deceived as a result of any false representations and issued the check in an attempt to lure her presence and facilitate her arrest.”109 The court agreed with the defendant and determined the record did “…not demonstrate reliance by the victim on the defendant’s misrepresentations.”110

Furthermore, § 877.54, Fla. Stat. (2009) and § 877.10, Fla. Stat. (2009) are similar to the mail, wire and bank fraud statutes because it is evidence of a defendant’s involvement in “…the scheme to defraud and not actual fraud that is required.”111 “No particular type of victim is required…nor need the scheme have succeeded.”112 Although the government need not prove there is any reliance or injury, it must prove beyond a reasonable doubt the evidence shows a “…willful participation in [the] scheme with knowledge of its fraudulent nature and with intent that these illicit objectives be achieved.”113 However, a defendant may have a complete defense to wire fraud, bank fraud, or money laundering negating the specific intent element of the statutes if a jury determines a defendant acted in a good faith belief his or her actions were not illegal.114

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The number of foreclosures in Miami-Dade and Broward continued rising last month, as mounting job losses crippled borrowers’ ability to make monthly payments and lenders lifted previous foreclosure moratoriums and resumed legal action against delinquent accounts. In Miami-Dade County, lenders filed 3,043 initial foreclosure actions against homeowners and reclaimed 819 homes through foreclosure. Hundreds more were scheduled for auction at the courthouse, according to a monthly foreclosure report from Irving, Calif.-based RealtyTrac.

Many lenders suspended foreclosures in the first half of the year as they waited for the Obama administration to release details of a national foreclosure prevention initiative. In February, it launched the Making Home Affordable Plan, which is expected to help as many as 9 million borrowers avoid foreclosure by refinancing or modifying their current mortgages.

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Hidayatullah Ali Khalil, 29, has been charged for providing false information on a mortgage loan application in attempting to purchase two home which would eventually become foreclosed. He was arrested last Thursday on a complaint levied by three separate individuals. The FBI took notice and have in holding in order to be seen in a federal court under a $75,000 unsecured bond. The incident of mortgage fraud resulted in Khali buying homes in Elk Grove and Watsonville, CA in 2005.

Khali removed more than $100,000 cash from the Elk Grove property in two separate transactions. Further investigation is underway by the FBI into the Santa Cruz police officer and other related individuals.

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Attorney Behr’s mortgage fraud prosecutions series continues with the following EXCERPT:

§ 877.54, Fla. Stat. (2009) should be reduced to an attempt because the crime was not completed.108 The defendant reasoned the corporation “…was not deceived as a result of any false representations and issued the check in an attempt to lure her presence and facilitate her arrest.”109 The court agreed with the defendant and determined the record did “…not demonstrate reliance by the victim on the defendant’s misrepresentations.”110

Furthermore, § 877.54, Fla. Stat. (2009) and § 877.10, Fla. Stat. (2009) are similar to the mail, wire and bank fraud statutes because it is evidence of a defendant’s involvement in “…the scheme to defraud and not actual fraud that is required.”111 “No particular type of victim is required…nor need the scheme have succeeded.”112 Although the government need not prove there is any reliance or injury, it must prove beyond a reasonable doubt the evidence shows a “…willful participation in [the] scheme with knowledge of its fraudulent nature and with intent that these illicit objectives be achieved.”113 However, a defendant may have a complete defense to wire fraud, bank fraud, or money laundering negating the specific intent element of the statutes if a jury determines a defendant acted in a good faith belief his or her actions were not illegal.114

Compared and Contrasted Against One Another

V. DEFENSES

Unlike § 817.545, Fla. Stat. (2009) and two other federal statutes concerning mortgage fraud previously discussed, both § 877.10, Fla. Stat. (2009) and § 817.54, Fla. Stat. (2009) require reliance by a person or entity by the fraudulent activity undertaken in order for a defendant to be convicted for either statute. § 877.10, Fla. Stat. (2009) specifically states this reliance requirement,102 but § 877.54, Fla. Stat. (2009) does not.103 However, the latter’s reliance requirement is laid out in the Third District Court of Appeal case, Adams v. State, 650 So.2d 1039 (Fla. 3d DCA 1995).

Attorney Behr’s mortgage fraud prosecutions series will continue with this portion of the article:

Dissimilar to the Florida statute, other states require “…a pattern of residential mortgage fraud…”99 to be proven beyond a reasonable doubt before being adjudicated of a higher penalty. Other states have even set out elemental qualifications for patterns of mortgage fraud. North Carolina’s legislature requires “…five or more mortgage loans which have the same or similar intents, results, accomplices, victims or methods of commission or otherwise are interrelated by distinguishing characteristics…”100 Kentucky, Georgia, Arizona, Mississippi and Nevada describe a pattern of residential mortgage fraud “…that involves two (2) or more mortgage loans…”101 Requiring state prosecutors to prove “a pattern of mortgage fraud” ensures those persons who intend to conduct schemes to defraud persons and lending institutions are truly deserving of heightened felonies. On the other hand, by not requiring “a pattern of mortgage fraud” the Florida Legislature has not only made Florida Assistant State Attorney jobs easier, but has also allowed those persons who conduct multiple acts of mortgage fraud to escape with only third degree felony convictions as long as the scheme total does not amount to $100,000.00.

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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