Missouri Woman Sentenced To 30 Months In Prison For Embezzling $576K

From KRCG13 on 1/29/2015:

A Columbia woman was sentenced to prison for a $576,000 mortgage fraud and embezzlement scheme during her employment at a title company.

50-year-old Terri Lynn Johnson was sentenced Wednesday to two years and six months in federal prison without parole. The court also ordered her to pay over $405,000 in restitution.

Johnson was hired for a clerical position with Guaranty Land Title Company in 2001 and eventually promoted to branch manager of the Fulton office. She remained in that position until her termination in 2008.

Johnson pleaded guilty to bank fraud and money laundering in July 2013. She admitted engaging in a $300,000 mortgage fraud scheme while employed as the Fulton branch manager. Johnson refinanced the mortgage on her home twice. As a result of the false information provided, two banks approved mortgage loans for $175,000 in 2007 and $125,000 in 2008.  The combination of those loans exceeded the appraised value of Johnson’s home, which was used to secure both loans.

Johnson also admitted she embezzled over $275,000 from Landchoice, parent company of Guaranty Land Title Company.  She also wrote checks to herself totaling nearly $60,000 and deposited them into her personal checking account. She also wrote checks to her personal business totaling approximately $12,500. Johnson utilized a debit card for the account to access nearly $185,000 from that account for her personal benefit.

The total personal benefit from this embezzlement scheme is estimated to be $276,173.

Alabama Woman Pleads Guilty To Embezzlement and Mortgage Fraud In $578K Scheme

Roxanne Saunders Gilliland, 56, of Rainbow City, Alabama, pleaded guilty to charges she embezzled $577,796 from Dawson Construction Company where she had been employed. Gilliland also plead guilty to mortgage fraud charges. Prosecutors alleged that over a three and a half year period, between March 2005 and October 2008, Gilliland withdrew the funds from company-related personal and business accounts. She is also alleged to have made a fraudulent mortgage application in 2007 claiming a Dawson corporate account as one of her own personal assets. She faces up to 30 years in prison, plus restitution and a fine of up to $1 million.

Read the story here, here and here.

Washington State Mortgage Fraud Cabal Indicted

A Seattle, Washington grand jury returned a 40-count indictment last week against 7 individuals in the Seattle area charging them with participating in a $46 million mortgage fraud scheme. Those indicted include Vladislav Baydovskiy, 31 and Viktor Kobzar, 32, principlas of Kobay Financial Corp, Camie Byron, 32, an employee of Kobay, Alla Sobol, 28, principal of Nationwide Home Lending, David Sobol, 40, and Donata Baydovskiy, 28, principals of Emerald City Escrow ; and Sandra Thorpe, 55, a bookkeeper who allegedly prepared false letters verifying employment for buyers. They all reside in the Seattle, Washington area. The indictment, which includes charges of conspiracy, bank fraud, mail fraud and wire fraud, alleges the defendants used "straw buyers" or other unqualified buyers with "vastly overstated incomes" to artificially inflate home values and acquire more than $46 million in mortgages from ING Bank, Washington Mutual and other banks. The indictment also alleges they kept $9 million for themselves. They were all arrested last Thursday. ING had previously brought a federal racketeering suit against Nationwide and Emerald City. Prosecutors are calling this the largest mortgage fraud case in state history. Some of the money was used to perpetuate lavish lifestyles of some of the defendants.

Read the story here, here and here.

Mortgage Fraud Up 26% Industry Study Says

The Mortgage Asset Research Institute released its annual report on mortgage fraud, which indicates an increase in mortgage fraud reports of 26 perent over the prior year and reaching the highest level to date. The sates with the highest percentage of fraud reports include the following listed in order:

• Rhode Island
• Florida
• Illinois
• Georgia
• Maryland
• New York
• Michigan
• California
• Missouri
• Colorado

Read the story here, here and here.

Update: Authorities Seize $400K In Gold Coins From Safe Deposit Box Of California Mortgage Fraud Suspect

Authorities seized the contents of a safe deposit box in Phoenix, Arizona belonging to mortgage fraud suspect, Christopher J. Warren yesterday. It contained 276 gold coins worth more than $400,000, some dating back to the California gold rush era. Warren was apprehended at the New York border trying to re-enter the US after fleeing the country amid the massive mortgage fraud investigation surrounding him and Loomis Wealth Solutions of Roseville, California. At the time of his arrest, Warren had $70,000 in cash stashed in his boots and was carrying 4 ounces of platinum worth about $7,000, according to authorities.

Read FraudTalk's original posts on this story here and here.

Read the story here, here and here.

Update: California Mortgage Fraud Fugitive Apprehended At Canadian Border

Christopher Jared Warren, 26, of Sacramento, California, who fled the country February 3rd while facing fraud charges, was apprehended yesteray at the Canadian border in upstate New York with $70,000 in cash stuffed into his boots. Until his disappearance, Warren had been cooperating with authorities who were investigating mortgage & investment fraud allegations involving Loomis Wealth Solutions, based in Roseville, California, and several related companies. Authorities promptly charged him with conspiracy, fraud and conducting a continuing financial crime. Two other associates also fled, Garret Griffith Gililland III, now in custody and Scott Edward Cavell, who is still at large.

Read FraudTalk's earlier posts on this story here and here.

Read the story here.

Update: One Fugitive Caught In $100 Million California Mortgage Fraud Case

Authorities in California reported tonight that one of three fugitives in a $100 million mortgage fraud case was apprehended in Spain last October and is fighting extradition. Garret Griffith Gililland III, 27, of Chico, California, is described as the "right hand man" of Christopher Jared Warren, who is at the center of the fraud and is still at large along with another co-conspirator, Scott Edward Cavell. Authorities said that they could not release the information about Gililland's capture as the investigation was ongoing.

Read the story here.

Read FraudTalk's original post on this story, including Warren's lengthy confession, here.

Florida Title Company Owner Sentenced To 5 Years For $18.5 Million Mortgage Fraud

Evelyn Rivera, of Wellington, Florida and the owner of Asset Title LLC of West Palm Beach, Florida, was sentenced Friday to 5 years in prison for her role in a mortgage fraud scheme that netted $18.5 million. Rivera had plead guilty to the fraud, which involved fraudulent mortgages on 55 condominiums in Fort Lauderdale. Two other conspirators in the scheme, Mike Acosta, a licensed property appraiser, and William Louisma, a recruiter of straw buyers, were also convicted for their roles in the scheme. Acosta was sentenced to 41 months in prison, and Louisma was sentenced to 46 months.

Read the story here and here.

Read the criminal information here.

California Fugitive Charged In $100 Fraud Scheme

Christopher Jared Warren, 27, of Sacramento, California, and currently a fugitive, has been formally charged with defrauding investors and financial institutions in a $100 million mortgage fraud and investment scheme. Warren, who was an executive of Loomis Wealth Solutions, and Triduanum Financial, based in Roseville, California, is alleged to have made fraudulent loan applications submitted to financial institutions involving some 500 properties in at least five states. According to his arrest warrant, Warren used the alias, Mark A. Seagrave, when he fled to Mexico. Prosecutors also allege that Warren solicited investors via seminars, encouraging individual investors to use funds from their home equity and retirement plans, to invest in the company in what prosecutors described as a Ponzi scheme. Warren reportedly chartered an aircraft for $156,000 to fly to Mexico, where he is believed to be in hiding. According to prosecutors, Warren had been cooperating with the investigation and had posted a lengthy confession on the triduanum web site, which is no longer up, prior to his fleeing last week. Another individual charged in relation to this case is Garret Griffith Gililland III, 27, of Chico, California, who is also a fugitive and believed to have fled the US. A third defendant, Scott Edward Cavell, 25, of Sacramento, California, has been charged with conspiracy to commit bank and mail fraud in this case. Cavell, also a fugitive, has used the alias of Adam Kingsbury Curry.

Read the story here, here and here.

Read Warren's arrest warrant here.

Here is the text of Warren's confession:

RESTORING INTERNATIONAL CONFIDENCE IN AMERICAN MBS/CMBS/ABSINVESTMENT SYSTEMBY: CHRISTOPHER JARED WARRENA. ResumeBefore diving into the heart of what is wrong, why its wrong, and what is needed to fix it, I mustspeak on my qualifications for this dissertation to substantiate my arguments. My name isChristopher Jared Warren, and in 2001 I was hired as a 19 year old to become a sales AccountExecutive for ACC Capital Holdings subsidiary, the now infamous “Ameriquest MortgageCompany”. Over the next three years of employment, I became the shining star of “portfolioretention”, a predatory division that would specialize in refinancing home owners who JUST gotloans from Ameriquest in the last 24 months. I was the number one producer in the region over60% of the time I was there, the company sent me to management training in Orange CA twice,trips to the Super bowl twice, Hawaii and Las Vegas based on my large production statistics andpaychecks. Most moths I would individually sell more then $5,000,000 in volume and bring inover $30,000 in net income……typically ore then 15 loans with more then 3 points and all rateshigher then 7.00% - much higher then industry standard at the time and not to mention not badfor a 19-22 year old kid with no degree. As a19 then 20 year old boy, my managers and handlerstaught me the ins and outs of mortgage fraud, drugs, sex, and money, money, and more money.My friend and manager handed out crystal methamphetamine to loan officers in a bid to keepthem up and at work longer hours. At any given moment inside the restrooms - cocaine and methwas being snorted by my estimates more than a third of the staff, and more than half the staffmanipulating documents to get loans to fund and more then 75% just completely made falsestatements on 1003s regarding stated income etc to get loans funded. A typical welcome aboardgift was a pair of scissors, tape, and white out, three things a loan officer or financial professionalshould never need.. Of course no where in training OR in management training did this 20 yearold ever learn that false statements on a 1003 were a federal offense. Overall in the two and halfyears I was at Ameriquest I funded over $90,000,000 in mortgages, of which more then$75,000,000 contained some sorts of material frauds undetected by management and funders.However, near the end of my employment there, I had hacked the computer systems run byEMPOWER for Ameriquest and was clearing my own funding conditions with nodocumentation, literally waiving file conditions as if I were an underwriter. The day I left I leftwith the entire customer database. I had made over $700,000 I was 22 had beat their system, hadgotten paid and ripped off one of the largest private companies in the worlds entire customerdatabase.So what to do with 680,000 Ameriquest customer private information? Well………..start amortgage company and offer better rates and lower fees then AMC. So at the ripe old age of 22, Ifounded a mortgage brokerage/bank - WTL FINANCIAL INC., at 22, a fraudster trained by thebest corporate environment for fraud, I built a company modeled after the movie boiler room andgot WTL licensed in OR CA, MN, CT, RI, FL as a mortgage banking company. From 2004 untilits grand 2007 collapse, WTL killed it. As a 22, 23, and 24 year old with no credentials I madeover $2.25m all of which was spent on 24 cars(at 26 the number is only 31 total), 5 houses,drugs, 1 engagement and split, 1 300 person wedding, 2 kids. Our company boasted region-best30,000 square feet, 120 employees, and handling a monthly gross revenue over $5m. Fraud wasrampant. We found investors that were not re-pulling credit reports, so we would change a 500fico to a 700 fico, a person in foreclosure and make It look like they were never late, fake w2s,pay stubs, bank statements, verification of deposits, none of which was being re-verified. Theseinvestors, who were securitizing these assets as AAA rated were not even verifying anything inthe files? I am sure that their investors were assured everything from correspondents was beingaudited. Every time a lender caught a file we would “fire” the employee produce terminationpaperwork to the investor, and re-hire the employee under a different alias. Over the course ofthe 3 years, over $810,000,000 in mortgage backed securities originated from my companies.That’s a 24 year old selling a billion dollars in bad mbs securities which by 2008 were in defaultwith out doubt. With the collapse of sub prime giant New Century, came our defeat, as we weretoo big and too stiff to be agile enough to change.So then in 2007 I diversified. I knew everything at the age of 25 about mortgage banking,origination, funding, reselling securities, underwriting. It was time to learn new things: moneylaundering, escrow company management, real estate, flipping, lease-backs, joint ventures, llcunit capital offerings. I found my place to learn AFG HOLDINGS COMPANY, the parentcompany of LOOMIS WEALTH SOLUTIONS, AFP of California LLC., AFG Technologies,and Nationwide Lending Corp(their mortgage banking division). I started as the general managerfor the mortgage company, turning it around in 90 days. When I showed up they hadn’t funded aloan in 66 days, they had no warehouse line and no investors. Within 90 days NLG was fundingagain, with a warehouse line, investors like Indymac, Lehman Brothers, and CITI MortgageCorp. The trick to this company was simple: AFG would partner with developers and buy realestate at 50 cents on the dollar, then sell it to his “financial consulting” members for 80 cents onthe dollar, wed appraise the properties at 100 cents on the dollar artificially inflate the purchaseprices so the loans were at 80 AFG would credit back the down and the closing costs. AFGwould net 25 points per closing and promise the buyers they would oer the mortgage payment,property management and even buy them free life insurance policy if they bought enoughhouses. This is what you call a classic panzi scheme because it requires exponential growth tocontinue. Words I never knew or understood prior to my experience there. Even in that volatileand crunching down market, fraud was still easy to execute. Another $44m funded while Imanaged the firm, until I got kicked out for starting my own title and escrow company. Thecomplete operation was highly illegal and a form of a panzi scheme. Still, I had no problems orresistance in getting close to fifty million in mortgages purchased and closed. Loomis Wealthand AFG Holdings ended up getting indicted by the Department of Justice after extensiveinvestigation by the FBI and the IRS. There is currently an investigation into my role with thisfirm and likely I myself will be indicted.Built a fraudster by my trainers in corporate America. Mastered the fraud. Trained others in thefraud. Paid by the fraud. Mastered mortgage banking, escrow, real estate. Every scam possible:fraud for profit, fraud to fund loans for the under-qualified, fraud of evasion of taxes, reverseflipping, flipping, false liens, software manipulation.And it utterly disgusts me. Looking back at the life I have led, I beg a higher power forforgiveness. For mercy. For I got caught up, my first corporate experience taught me fraud mixedwith drugs and money. The very top ranks of the corporate ladders knew what was going on.“When a pool of loans gets audited they will audit less then 10% of that bulk pool, and if theyfind a loan with misreps we simply replace it with a loan from another pool and put the bad loanback in to another pool and hope it wont get audited”2002 Vice President of Collateral –Ameriquest Mortgage in Orange, CA. But its always the small guy, the kid, the kid off the streetwith no college degree no ethics training no nothing they teach how to do their dirt, like a gangrecruiting a minor who will only go to juvy. I was only rewarded for my actions. Trips, over 16trophies from AMC alone, prizes and huge paychecks. I am disgusted. This is the reasonAmerican Mortgage Backed Securities and ABS pools are being hammered and default rates areat heir highest level. And what has been bred is a new generation of younger fraudsters that areyoung, technology adapt, and much quick and innovative then their two generation oldercounter-part regulators and regulation authors.And it is around that final point that is the center for this memo on mortgage fraud itsconsequences and final solution: the disparity between the talent of the regulators and thefraudsters. The age plays into it. The ambition and drive plays into it. The technology plays intoit. But still, if you could only put the correct people at the top of regulation, writing the regmanuals and enforcing them to 100% on pre-purchasing of assets by the government, you couldliterally cut mortgage fraud down so massively that you could see a return to below traditionallyacceptable foreclosure rates, somewhere in the 1.5 – 2.5% range vs the typically accepted rangeof 3-5% and the current level of 13.9% and in California, FL, NV over 21%. That’s right,eliminate mortgage fraud. Completely. Forever.And if it doesn’t happen, this economic downturn which was entirely started by mortgagefraud(well get into that in a minute) will continue to plague us and housing will not get a solidfooting in housing again because currently I would speculate that over 40% of mortgagesecuritizations today in Q1 2009 have some form of misrepresentation on them, whether detectedor undetected. If you fix MBS and ABS securities, you will re-ignite performance and foreignand domestic investors will believe again in a broken system, putting back much needed cashinto the system to increase liquidity, balance sheet, and the overall economic production of thenation.I helped ruin this nations economy. Almost a billion dollars of toxic assets came from memaking others above me rich beyond my imagination. They asked for more and more,knowingly, and I gave it to them. Now I intend to fix it and help the best I can by sharing what Ihave learned and know. I am the best at what I was taught and then re-created again and againand mastered myself. I am the best man for shutting it down. Completely and forever.2. The Heart of The ProblemThe credit crisis. The recession. The total fall out of investors foreign and domestic fleeing fromonce-loved American ABS and MBS securities. The fall out of the this has spread to a lack ofliquidity from home owners to corporations, affecting everything from gas to employmentfigures, to the auto industry. The current state of the financial markets as of Q1 09 entirely has itsroots in the mortgage and real estate collapse which in turn crippled and effectively killed thecredit markets. When the problems first started arising in 2006, economic experts predicted thatthe problem was only a “sub prime” and “alt a” problem that would stay confined to thecompanies like Long Beach Mortgage, Ameriquest, New Century, ABC Mortgage, Indymac,those companies that insured, purchased, and securitized loans with horrible underwritingguidelines. The problem was this: it wasn’t just these independent or subsidiary companies at all.Deutche Bank, Merryl Lynch, Citi Group, all were purchasing insanely high volumes of fundedloans with horrible underwriting guidelines that would have made an underwriter from the 70s or80s complete scream at the top of his lungs in concern. But its not just the underwritingguidelines that caused this, because that is already fixed by Q1 09. In today's current climate,underwriting guidelines are where they should be. Full documentation on income, lower levels ofdebt allowed vs your income, and more needed for down payments or more equity to beapproved for a refinance. All this being done, still does not come close to fixing the problem.Now, more then ever, in this market, as an industry insider I see more fraud happening now thenin 2005. More fraud. Bigger fraud. Bigger profits. More defaults and foreclosure. So theunderwriting is fixed but the industry still cannot improve the performance of their mortgagebacked securities.The problem is mortgage fraud has morphed, and will never ever bee a stagnate thing. Theregulators, managers, qc department employees, guideline writers, and board members ofmortgage lending institutions and banks are all, when averaged, over the age of forty seven. Theaverage mortgage fraudster is in mid twenties to early thirties. Most fraudsters are completeidiots, as they are just the typical criminal, that have found a different arena to smash around in.They are the easy ones to find: first payment defaults, obvious white out on documents, 1003sthat don’t match Super pages or cant pass a Veri-tax.com Mortgage Fraud Report. The currentsystem is good at catching these gentlemen and ladies. The problem is the 5% of fraudsters outthere there are extremely intelligent, agile, and constantly innovating techniques to beat everyeffort of the anti-fraud forces in the banking industry. Age plays into this, because the youth isinnovative and aggressive, and as we age and approach AARP land, we become less nimble inour mind, closed to new ideas.I actually had an FBI agent ask me “how in this market with all the changes is it even stillpossible to get cash back on a purchase”. Any FBI agent who has to ask that question, shouldn’tbe involved in a mortgage fraud investigation, period. This example brings us the secondproblem, and that’s the individuals fighting fraud are doing it completely backwards and with thewrong skill-sets. Mortgage fraud can be, should be, and is desperately needed to be fought fromthe front, aggressively stopping mortgage fraud before the funding date by a special division, anationwide division, that is focused on mortgage data, title and records, and streaminginformation from investors, funders, and originators. Mortgage fraud currently is regulated byprosecution. This is unacceptable.Lastly there is way too much duplication in our current system of collateralized lending andmortgage securitization. This leads to poor performance, fragmented information sharing if anyat all, and low securities performance. The fact is simple that with the nationalization of Freddieand Fannie that is four government-owned agencies that are purchasing and/or insuring over96.5% of the mortgage fundings on residences in America. That is so beyond against theconstitution, but mandatory in todays market. We must realize that subsidy is the savior fromdepression, which can easily be accepted once studied. But if the government if this country isgoing to be this big of a player on the nations biggest natural resource: American land andlending on that land, then it absolutely and unequivocally cannot run it like it runs most of itsbureaucracy's: inefficiently. It has to be streamlined. It has to be non-duplicated in roles andresponsibilities. It has to have its own internal mechanisms of regulations and controls andchecks and balances.Why are there THREE institutions that do the EXACT same thing for the federal governmentand the three boards and senior managements of those firms take out over $200m a year incompensation when the companies are losing money? Why is the performance of the securitiessuffer so much? Because they aren’t doing it right and haven’t been. The answer is simple: themortgage industry fell behind the technology industry department, and never caught up, and ithas cost them and now the entire country greatly, in the trillions of dollars.The philosophy is wrong: instead of regulation by prosecution it should be regulation to preventfraudulent fundings. This has to change first and foremost. When your at war, and trust me, thisis a financial war with huge consequences(fraud losses topping over ¾ of a trillion dollars in2008), you don’t wait for the opposing enemy to bomb, then invade your home towns and thenafter they have burned your bridges and farms and houses drop a nuke on your own home townto kill them. That is the equivalent of our current regulation. Let the fraudsters do fraud, theyfund a bunch of bad loans, and after the losses have piled high enough then and only then do wego in a tear it all up. You have to catch them upfront. Its possible. The current staffing,regulators, and investors simply are too under-qualified, under-trained, and not coordinated witheach other enough to make it happen. Their solution is fancy computer modular software thatgives you “mortgage fraud scores” or “avm modules” to “reconcile discrepancies”. Its allbullshit, I have beaten those computer models time and time again and other fraudsters knowhow to as well and you will continue to see the same results if the same regulators, regulationwriters, and enforces stay in place that exist today.The analysis is wrong: many times FBI agents who just got transferred from narcotic divisions orinternational assignments are put on mortgage fraud with absolutely no background. It has takenme ten years of learning to get to where I am and I would consider myself an extremely capableand fast learner far above average and anyone with less then five experience has no right leadingor working a mortgage fraud case. Mortgage fraud cases MUST be worked by industry insiders.And while there must be oversight and traditional law enforcement structure and attorneys at thetop and managing it, those insiders must be younger or show extreme signs of quick learningability and/or demonstrate knowledge of today's advanced fraud techniques. Its a very basicprinciple that each generation that comes up through the professional world takes the work fromthe previous generation and makes strides to improve the efficiencies, technologies, and methodsof the generation before them. The industry must self regulate with law enforcement assistancewith the help of the generation and industry insiders. Meaning if a majority of the fraud is beingcommitted by 20-30 year olds inside the industry utilizing highly technological techniques whydo you have 40-60 year olds who don't understand the technology who got transferred to thistype of work from interstate commerce, traditional banking, narcotics,etc? You wouldn't andyou shouldn't. As previously stated, traditional law enforcement figures are fine for oversightand management but you must leverage the best from the other side against themselves,increasing efficiency bringing in the newer fresher though processes with a better and moreconcrete understanding of the business and the fraud. The bigger and more elaborate thefraudster, the better permanent asset that individual could be if flipped into a consultant and/oremployee for the federal government, specifically the Department of Justice and the MortgageFraud tasks forces.The time is wrong: the FBI and DOJ are prosecuting their regulation. This is incorrect becauseby being reactive instead of proactive you are allowing massive frauds to occur for billions andbillions of dollars in losses and damages further pushing MBS and ABS ratings into the dump,and eroding investor confidence in the securities. You regulate by doing just that, regulating.Increase efficiencies and processes, require more burden of proof prior to loan funding and resaleon capital markets. Operate under the assumption that every mortgage application is beingprocessed by a fraudulent borrower, loan officer, processor, or underwriter. Assume that thecomputer technology being used by investors and mortgage banking institutions are inadequateand are already being beaten by fraudsters, because they are. Assume nothing works and that nomatter what the "representations and warrants" are of a warehouse lender, the correspondentlender, or the Freddie Mac or Fannie Mae seller, that is not good enough and there is truly noamount of net worth or security can cover a 50% default or fraud rating.Change the philosophy change the analysis, change the team and/or add a lot of new team mates,and change the timing of regulation.C. Executing Change and Expected Results, A Return to Stability in SecuritiesJust on the platform that our new commander in chief used, the time for change is now. You canrestore confidence in MBS and ABS, and REITS, and American investing by eliminating fraud.Today the guidelines have been fixed, but the fraud hasn't, and it has worsened. As more andmore loan officers go broke and more and more real estate professionals go broke they areturning to fraud to fund deals and raise money. Eliminate fraud and you lower delinquencies, getrid of foreclosures restore confidence in securities, restore confidence and the credit markets arerestored, and with credit markets restored the rest of the economy will utilize much neededfacilities and regain a solid footing once again. Literally you can fix the majority of the problemsby regulation and eliminating fraud. Streamlining effeciencies must be the first step by mergingthe four government agencies into two(Freddie, Fannie, Ginnie, and HUD) into two (HUD andFreddie) and have Freddie absorb FNMA and Ginnie Mae. Immediately cutting overhead andcosts by over 60% and reducing the staffing and overhead costs, hence increasing profitabilityfor the government to help offset costs of future defaults of all the mortgages booked prior theexecution of a business plan modeled after this memo.Next step is to increase the information sharing by all agencies and utilize a platform as aninformation verification center. MERS is a perfect government-sponsored entity is the perfectentity for this. It is already used as an anti-fraud and mortgage transferree platform by all fourgovernment investment houses, all major mortgage funding sources, and a majority ofcorrespondent lenders. Expand its access to include title searching capabilities, access to all IRSdocumentation, and access to FDIC depository records and SEC holding records to verificationof assets independent from the origination processes. Use this verification platform to build thesecurity, as opposed to utilizing documentation provided by borrower and/or originator. Whilethis will be the most expensive and very costly endeavour, it pales in comparison to the hundredsof billions of dollars spent on curing and/or selling toxic assets insured by the tax payers at aloss. Even at a cost of $1b the return on investment will be over 1000%.Then infuse talent to any and all federal mortgage fraud investigations currently in process, andmandate co-operation by all lenders and investment companies for the new blood to have accessto files prior to funding and pipeline reviews - truly regulating pipelines and helping findcriminals prior to funding. Have all Suspicious Activity Reports filed in regards to mortgageactivity immediately diverted to the new task forces force teams. Just as any part of the FBI youbring in talent on every level, low level, mid level, and management. Not to replace but to act inconcert, provide guidance and speciality information to assist with the cases, and identify andprevent mortgage fraud in action before fundings occur, bringing regulation to pro-active insteadof re-active.Following this steps increases efficiency, saves billions of dollars, gets the right people in theright place, utilizes the talent of the people that actually know what to look for, and will bringdefaults caused by fraud down to acceptable levels: 0-1%. At a maximum. This is what iswrong and how to fix it. I am the man for the job, Chris Warren, have the managementexperience, the banking experience, and could assist in the oversight of the most majortransformation of mortgage regulation without changing one guideline and still completelyeliminate mortgage fraud and restore confidence in the American dream and the securities thatthat very dream provides for investors. The performance of the securities improves, the fundswill come back, the government can re-sell off positions in Freddie Mac, or keep possession andreturn to massive profitability which could act as a huge profit center to help pay for manyneeded budget and defecit shortfalls and provides answers for the overall performance of thenational budget and economy.Christopher Jared Warren

Oregon Loan Officer Sentenced To 5 Years For Mortgage Fraud Scheme

Marty Ray Folwick, 50, of Portland, Oregon, was sentenced to more than 5 years in prison for his role in a mortgage fraud scheme that cost lenders more than $800,000 and involved over 70 property transactions. Folwick, who worked for Lighthouse Financial of Vancouver, Oregon, set up "straw buyers" and falsified loan documents in order to get lenders to fund fraudulent mortgages. He plead guilty to four felony counts in October, including one count of bank fraud, two counts of wire fraud, and one count of money laundering. Folwick allegedly received a $25,000 kickback on one transaction, according to prosecutors.

Read the story here, here and here.

Report Says Mortgage Fraud Up 45% Over Same Quarter Last Year

A report published by the Mortgage Asset Research Institute says that incidents of mortgage fraud in the second quarter increased 45 percent over the same period last year. Florida, California and Illinois were the states with the greatest increases, according to the report. The Mortgage Bankers Association claims that mortgage fraud cost lenders $1 billion over the past decade.

Read the story here and here.

Find the whole report here.

Motion To Dismiss Ohio Securities & Mortgage Fraud Case Denied

A defense motion to dismiss all 69 counts of fraud in the trial against Evergreen Corp.'s president, David B. Willan, 38, were rejected by Summit County Common Pleas Judge James E. Murphy after a 3 hour argument by the defense. Willan was charged with a host of felonies, including securities fraud, aggravated theft, "theft from the elderly," engaging in a pattern of corrupt activity, selling securities without a state license, making unlicensed small loans and being an unregistered second mortgage lender. Willan's sister, Sandra L. Langer, 52, also an Evergreen executive, was indicted on 20 fraud counts. She pleaded guilty to 3 of the counts, including engaging in a pattern of corrupt activity; securities fraud; and being an unlicensed securities dealer. 15 other co-defendants were charged in the original 147 count indictment.

Read the story here, here and here.

Connecticut Mortgage Broker Pleads Guilty To Mortgage Fraud

Fred Stevens, 52, of Easton, Connecticut and a mortgage broker in Westport, Connecticut, pleaded guilty Tuesday to charges of mortgage fraud. According to the criminal complaint, Stevens, working with real estate developers, appraisers, bankers, attorneys and others, defrauded IndyMac Bank by submitting false mortgage applications resulting in losses of more than $1 million to the bank. The fraud took place between April 2006 and September 2007, according to prosecutors. Sentencing is scheduled for February 13, 2009. Stevens faces up to 30 years in prison, plus a fine of up to $2 million and restitution.

Read the story here, here and here.

Read the DOJ announcement here.

Georgia Attorney Sentenced To Nearly 5 Years For Mortgage Fraud

Mary Reagan, 41, of Alpharetta, Georgia and principal of The Reagan Law Group, was sentenced yesterday to nearly five years in prison plus ordered to pay some $4 million in restitution for mortgage fraud. According to authorities, between mid-2004 and June 2006, Reagan closed millions of dollars in mortgages based upon inflated valuations or fictitious "straw" buyers. She then transferred the funds to co-conspirators by falsifying HUD-1 settlement statements and other documentation. Reagan's co-conspirators named in the indictment were Adriene Newby-Allen, aka Cassandra Miller, 41, of Alpharetta, Georgia, Brinson Allen, 40, of Alpharetta, Georgia and James Howard Bailey, III, 37, of Houston, Texas. Reagan plead guilty in July 2008, shortly before she was to go on trial.

Read the story here, here and here.

Read the DOJ indictment announcement here.

Read the FBI sentencing announcement here.

Virginia Man Pleads Guilty To $33 Million Mortgage Fraud Scheme

Vijay K. Taneja, 47, of Fairfax, Virginia, plead guilty to one count of conspiracy to commit money laundering involving his company, Financial Mortgage, Inc., which originated and sold mortgages in the Washington, DC area. Taneja, through his company, arranged for temporary funding of the groups of mortgages before selling them. According to the complaint, beginning in 2001, FMI began defrauding a series of warehouse lenders and eventually two other financial institutions serving as long term investors, causing an accumulated loss of at least $33 million to four financial institutions by the time FMI filed for bankruptcy in June 2008. Taneja reportedly invested millions in Indian movies and concerts. He was also the head of Elite Entertainment, Inc., which promoted celebrities from the Indian film industry. He faces 20 years in prison, plus a $500,000 fine and restitution.

Read the story here and here.

Palm Beach Socialite Charged With Bankruptcy Fraud

Linda "Lin" Castre Gosman, 59, the wife of bankrupt heath care executive Abraham Gosman, pictured together here, was indicted yesterday on 16 felony charges, including five counts of bankruptcy fraud, two counts of mortgage fraud, nine counts of structuring and related forfeiture. The indictment contends Gosman owes $66 million in her husband's bankruptcy case and charged her with attempting to hide assets including expensive jewelry and artwork. It further contends she attempted to conceal assets through withdrawls from offshore bank accounts.

Read the story here and here.

Disbarred Pennsylvania Attorney Pleads Guilty To $713K Fraud

Michael D. Bart, 61, a disbarred attorney from Wilkes Barre, Pennsylvania, plead guilty to wire fraud on Thursday, admitting that he misappropriated some $713,000 from Ohio-based Guaranteed Title and Trust Co. He faces 30 years in prison and $1 million in fines.

Read the story here, here and here.

See his disbarment notice here.

Houston Mortgage Broker Indicted For Mortgage Fraud

Clarence Lewis III, 45, of Houston, Texas, the owner of Motown Mortgage Group, indicted last week with charges of conspiracy, wire fraud and money laundering in an alleged scheme to defraud residential mortgage lenders. The indictment alleges that Lewis defrauded mortgage institutions between January 2002 and January 2007 by fraudulently inducing them to fund more than $12 million in mortgage loans. Lewis allegedly recruited individuals as fronts and used falsified documents to accomplish the fraud. Proceeds from the fraudulent loans were deposited into bank accounts in business names associated with Lewis, including Motown Mortgage Group and Astro Construction Company, according to the indictment. He faces 20 years in prison, plus a fine of $250,000 on each of the conspiracy and wire fraud charges if convicted. He faces 20 years in prison plus a fine of $500,000 if convicted on the money laundering charge.

Read the story here.

Key Player In Florida Mortgage Fraud Pleads Guilty, Agrees To Testify

Michael Tringali, 46, a Florida businessman, agreed to plead guilty yesterday to one count each of loan fraud, bank fraud and money laundering in a $83 million mortgage fraud case. Tringali also agreed to pay $6.9 million in restitution and to testify against his former partners to further reduce his sentence. In exchange, the government agreed to drop 15 other mortgage fraud counts against him. In a 96 count indictment handed down in July, Tringali was charged with defrauding seven banks, together with co-conspirators Neil Mohammad Husani, right, John Yanchek and Larry Nardelli.

Husani was last known to be in Amman, Jordan where authorities are seeking to extradite him in this case. Both Yanchek and Nardelli have plead not guilty. The fraud allegedly took place between June 2004 and March 2006 wherein Husani purchased 2,000 acres of land in Sarasota and Manatee Counties and resold the property to Tringali and the other defendants for an inflated price. The transaction allowed Tringali and the others to obtain seven mortgages from seven banks totalling $83 million. Tringali still faces as much as 5 years in prison and a fine of $250,000, in addition to the restitution.

Read the story here, here and here.