Conspiracy to Commit Mortgage Fraud

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Quoting Persecuted

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Look at it this way -

What if a mortgage company and a title company were intent on committing fraud in order to perpetuate a substantial volume of transactions to support their massive overheads? Isn't it obvious that they could get the overwhelming majority of their clients to sign documents that stated things like there hadn't been another transaction in the previous three years or that a home would be a primary residence (when there were five home purchases)?

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Nope. No way on God's green earth would I commit to that many loans with my signature no matter how wonderful the payoff is supposed to be. I do not even see what you are alleging. How many "clients" do you think get multiple home/large loans? Certainly some business people get many loans and you thought yourself such. Business people should know their business and know home loans go for less rate than business loans and signing mortgage documents for a lesser rate would be a crime.

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In this situation how would the home purchaser not be considered a victim of the fraud? That is what I am saying - I was a victim - not a co-conspirator.

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You were a victim because you got caught. You got the money, did you not? While you invested it in property/corporation, how was it you were a "victim" of the fraud? You may have been a victim of a separate crime, but not of the mortgage fraud.

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"Greg's" right hand man - I think his title was VP of something or other - has told our investigator that he was even caught forging people's signatures on loan applications.

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He should be prosecuted for that. Maybe he is turning state's evidence to get out from under or something.

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If I thought I would get some valuable feedback besides "you're guilty - rot in prison" then I'd submit the entirety of what the prosecution will present and what my defense will be. But I'd probably get scolded for posting a novel as I did after my initial post.

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I never said you were guilty. I said what the hard part was they were going to try to prove and how they were going to prove it. You have not presented anything close to something that will challenge what they will try to prove. Intent is hard. Your multiple acts within the conspiracy and the profit you hoped to gain are two strikes against you. That you did not have corrupt motives is your only chance and there it seems like you have some level of mens rea.

From the U.S. Attorney's criminal resource manual, it seems they use "reckless indifference":

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949

Proof of Fraudulent Intent

"The requisite intent under the federal mail and wire fraud statutes may be inferred from the totality of the circumstances and need not be proven by direct evidence." United States v. Alston, 609 F.2d 531, 538 (D.C. Cir. 1979), cert. denied, 445 U.S. 918 (1980). Thus, intent can be inferred from statements and conduct. United States v. Cusino, 694 F.2d 185, 187 (9th Cir. 1982) (citing United States v. Beecroft, 608 F.2d 753, 757 (9th Cir. 1979)), cert. denied, 461 U.S. 932 (1983). Impression testimony, that is, testimony of victims as to how they had been misled by defendants, is admissible to show an intent to defraud. See Phillips v. United States, 356 F.2d 297, 307 (9th Cir. 1965), cert. denied, 384 U.S. 952 (1966). Also consider complaint letters received by defendants as relevant to the issue of intent to defraud. The inference might be drawn that, since the defendant knew victims were being misled by solicitation literature and other representations, the continued operation of the business despite this knowledge showed the existence of a scheme to defraud. Fraudulent intent is shown if a representation is made with reckless indifference to its truth or falsity. Cusino, 694 F.2d at 187. In addition, "[f]raudulent intent may be inferred from the modus operandi of the scheme." United States v. Reid, 533 F.2d 1255, 1264 n. 34 (D.C. Cir. 1976) ("[T]he purpose of the scheme 'must be to injure, which doubtless may be inferred when the scheme has such effect as a necessary result of carrying it out.") (quoting United States v. Regent Office Supply Co., 421 F.2d 1174, 1180-81 (2d Cir. 1970) (quoting Horman v. United States, 116 F. 350, 352 (6th Cir.), cert. denied, 187 U.S. 641 (1902))). "Of course proof that someone was actually victimized by the fraud is good evidence of the schemer's intent." Id. (quoting Regent Office Supply Co., 421 F.2d at 1180-81). In United States v. D'Amato, the court explained the government's burden of proving fraudulent intent as follows: The scheme to defraud need not have been successful or complete. Therefore, the victims of the scheme need not have been injured. However, the government must show "that some actual harm or injury was contemplated by the schemer." Because the defendant must intend to harm the fraud's victims, "[m]isrepresentations amounting only to a deceit are insufficient to maintain a mail or wire fraud prosecution." "Instead, the deceit must be coupled with a contemplated harm to the victim." In many cases, this requirement poses no additional obstacle for the government. When the "necessary result" of the actor's scheme is to injure others, fraudulent intent may be inferred from the scheme itself. Where the scheme does not cause injury to the alleged victim as its necessary result, the government must produce evidence independent of the alleged scheme to show the defendant's fraudulent intent. 39 F.3d 1249, 1257 (2d Cir. 1994) (citations and footnote omitted) (holding that the government failed to produce legally sufficient evidence of criminal intent).

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Below I've laid out a few of the MANY points of my defense. And there are way too many to post in this forum without getting banned (probably - based on the scolding I've already received).

And yes - there were literally HUNDREDS of people doing 3-5 of these home "flips." This was pretty much all this company was doing, and he had over 100 people working for him.

For now I'll just share a few more of the plethora of points of my defense:

1) In order to qualify for the mortgages I was told that I had to have an income of over $100k. I told him I didn't currently make that, so I wouldn't qualify. He said, "you just need to get the board to approve raising your salary - hell, we pay several of our employees more than that anyway - you should be making that anyway." I asked him how getting my salary approved now would allow me to qualify - he said these were sub-prime mortgages that only required a "stated income" and that as long as I was making that I would qualify.

So I immediately called a board meeting wherein Greg presented the proposal of me doing the home flips as a stop-gap measure to cover the operating expenses in lieu of further capital calls. At the meeting one of our board members - someone who was an 83 year old commercial realtor who had over 40 years of experience - asked the same question I'd asked, "if we approve his salary increase today how will that allow him to qualify - won't he need several years of tax returns to substantiate his income?" To which Greg replied, "no - these are sub-prime mortgages which only require a "stated income." This satisfied this man as to the legality of the mortgages which even gave me a further level of comfort. I told the board that if they didn't approve my salary increase then I would not do the mortgages because I refused to sign something that wasn't true. That meeting was recorded, and I have a copy of the recording. The board approved my salary increase, and I was paid the increased salary in subsequent paychecks.

2) There are many examples of how my behavior was not reflective of someone who was knowingly and intentionally committing a fraud but the exact opposite. First, if I was going to commit a fraud why ask the board for a salary increase? Why not simply sign a mortgage application stating that I made that salary? Second, I made several mortgage payments on each home. If I was going to commit a fraud for profit why would I have done this? Third, I spent tens of thousands of dollars making improvements to each home including major landscaping and pool repairs - again, why would I have done this? The previous owners of these homes did nothing to improve them. Fourth, I was told that I needed to live in each home for a short period of time and that I needed to stage them in order to sell them faster. So I actually purchased tens of thousands of dollars in furnishings and moved into each home for at least six weeks. Why would I have done this if I was committing a fraud?

I could go on and on. Obviously this post is getting too long, so I won't.

As to point one, if you actually claim that, you will need to show how the company could reasonably expect to pay you the salary. Otherwise it is just another act in furtherance of the conspiracy. As to point two, that is bad for you. It truly seems you are trying to make a false claim regarding your intent. You clearly and repeatedly state your intent was to flip the houses. Yet you create a false flag of the mortgage being for your personal residence. You simply do not understand what is going on. Let me make it a bit more clear. (Again, without access to the facts.)

Mortgages have different rates depending on the purpose and credit and method of proving up income of the borrower. You used a stated loan as you did not have the credit or provable income enough to qualify for the loan normally. If the corporation did not have a reasonable chance of supporting that income, your claim on stated income would be fraud. There the consideration would be the books of the corp. Apparently, they were in some money issues and that is probably not going to be a good point for you. You also claimed you were going to use the loan for your personal residence. Such a use gets a lower interest rate. You admit you were not. Your signature on the mortgage documents is presumed to be with knowledge of what you were signing. I know you say you had no idea, but, you have a presumption to overcome with nothing but your word to overcome it. That is mortgage fraud. You cheated the bank out of a fair interest rate.

Just for fun, look at the recently argued case in the Supreme Court. While the issues are not yours, as it gets to the convicted person's requirement to make restitution, it will show how you are not the only person actions the government found problematical.
http://www.law.cornell.edu/supct/cert/12-9012

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Benjamin Robers pled guilty to conspiracy to commit wire fraud under 18 U.S.C § 371. In the mortgage fraud scheme, Robers acted as a straw buyer, meaning he took over title to two properties in order to conceal the true owner and ringleader of the scheme, James Lytle. Although the scheme involved fifteen houses in a small county in Wisconsin, Robers only served as a straw buyer for two of the houses. For his role, Robers received $500 for each loan.

As part of the scheme, Robers made material misrepresentations about his income, qualifications, and intent to live in the houses he purchased and to repay the mortgages. These misrepresentations led lenders to wire loan funds to settlement companies, which closed the loans. Later, the loans went into default and the banks foreclosed on and sold the houses as collateral for the loans.

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Quoting Welfarelvr

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Yet you create a false flag of the mortgage being for your personal residence.

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I never created such a flag. I was never aware that there was anything about a primary residence statement in the mortgage documents. Again, as I stated earlier, the lady who did three of the four closings for which I've been indicted has stated that she didn't know what this clause was nor did she explain anything about it to me. Greg simply told me that I had to live in each home for a short period of time - so that is what I did.

I understand (now) that there is a different rate given to someone buying a home as their primary residence - so why would someone who is only expecting to own these homes for less than 90 days care about shaving a few fractions off the mortgage rate? Is it logical that someone would commit a fraud to save a few hundred bucks? I also (now) understand that a lender (historically) used the information in terms of whether a property was an investment property vs. a primary residence to weigh their risk factor - meaning that an investment property would be a higher risk than a primary residence for obvious reasons. But that is a historical measurement. The reality of the mortgage industry in 2006 was that lenders really didn't care anything about these things - they simply wanted volumes of transactions. They intentionally created an environment where "shitbag mortgages" (an actual industry term) were routinely accepted simply because they didn't care that they were low quality, high risk mortgages - they simply bundled them with other mortgages and sold them off to some unsuspecting buyer.

You can say anything you want - the reality is that the prosecutor has to prove that I knowingly and intentionally committed a fraud. I submit that I have a voluminous amount of evidence to show that the opposite was true - that I had been made to believe that these transactions were 100% legal and that I was concerned that this was the case. That is very different.

Let me guess Welfarelvr - you're a prosecutor?

What is your question?

You want a question? Here is one...

If you were 100% innocent would you plead guilty because if you went to trial and lost you would face 17 years in federal prison (according to the guidelines - not the statutory provision) but the prosecutor offered you a "deal" that would allow you to spend only one year in prison?

Well I won't accept that deal. I am innocent - and either way a conviction would mean the end of my life. In fact, if I only spent one year in prison that would simply mean that I'd have to live under a bridge when I got out.

Again, feel free to delete this thread.

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Quoting Persecuted

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If you were 100% innocent would you plead guilty because if you went to trial and lost you would face 17 years in federal prison (according to the guidelines - not the statutory provision) but the prosecutor offered you a "deal" that would allow you to spend only one year in prison?

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As a general rule, I don't think anyone who is innocent would want to plead guilty. It all comes down to the totality of the circumstances. If you have a crap case that even your attorney says is a dog, you have 2 choices. Get a new attorney or take the deal. If you are looking at 17 and can walk with 1 and the odds are stacked heavily against you, you have to consider that.

Your case/issues are FAR beyond what an internet forum can help you with. Only an attorney with the full facts of your case, as well as knowledge of what the prosecution has against you, can give you proper advice.

Yes, well the problem is that I don't believe my attorney will defend me. Without getting into the specifics, some of which I mentioned in passing earlier (Koch brothers), I am 90% certain I will end up representing myself at trial. I must spend the next few weeks preparing for that.

Let me ask this - can I submit here what I know will be the government's case and then present my case in its entirety to get feedback on what you all think? I'm interested to know what hurdles will be faced in trying to get some of this in. I know if federal court things are very different than in a state court.

Is that something I can do here? Or do the rules of this forum prohibit this sort of thing? I would just like to get the opinions of lawyers so that I can be prepared when I step into the courtroom.

Thanks

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Quoting Persecuted

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Yes, well the problem is that I don't believe my attorney will defend me. Without getting into the specifics, some of which I mentioned in passing earlier (Koch brothers), I am 90% certain I will end up representing myself at trial. I must spend the next few weeks preparing for that.

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If you choose to go to trial without a lawyer due to your seemingly paranoid beliefs that your lawyer is not going to represent you, you are asking to be convicted. Representing yourself is not easy, and the old adage about having a fool for a client rings true.

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Quoting Persecuted

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Let me ask this - can I submit here what I know will be the government's case and then present my case in its entirety to get feedback on what you all think?

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No, that's not wise. The prosecutor's office can find threads posted in public forums.

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Quoting Persecuted

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I'm interested to know what hurdles will be faced in trying to get some of this in. I know if federal court things are very different than in a state court.

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Things can be extremely different.

Not only am I not a prosecutor, but also I sincerely believe everyone deserves the best defense possible. With that in mind, you MUST listen and retain your attorney. You can try to get another, but going on your own in something you clearly do not fully understand is just going to get the prosecutor a guilty conviction.

If you look at things from outside your perspective, all your actions are exactly the ones a person intending to defraud the banks would take. You signed false documents with false representations. You tried to cover those false representations by manipulating reality at the corporation and by making a pretense of living at the properties. Your defense is that you did not understand the documents you signed, you were told the corporation should be paying you six figures and your co-conspirator said all you need do is live in the house for a little while to pretend it is your residence.

They will counter by showing you are presumed to know what you are signing. You do not have the skills, experience or ability to earn six figures. And, you should know that doing things to make it seem like one thing is true when it really is not is problematical.

I must tell you it looks bad. It is never a good defense that you just were tricked by your co-conspirators. Even if it is true, it seems like none of this was something you really had a chance to make a real living at. They will bring in character evidence to try and show intent if you have ever been convicted of a crime or done something wrong or other act that might show something about your role in the scheme. You will try to weave a path midway between showing you were sophisticated enough to deserve the salary and do the acts, but not sophisticated enough to actually know about the issues involved with the acts. Threading that needle will not be easy and I suspect your attorney, with your approval, will not want you to testify if it gets to court.