Conspiracy to Commit Mortgage Fraud

In July of 2011 I was indicted for Conspiracy to Commit Mortgage Fraud and multiple counts of Wire Fraud surrounding the purchases of four homes I made in 2006. As it happened a friend and business associate of mine who was also on the board of directors of a software company I had founded owned a mortgage company. His company was large and employed over 100 people. In early 2006 he showed me an infomercial by Carlton Sheets that said if you purchased his DVD series he would show you how to purchase homes with no money down and receive cash at closing. My friend then showed me several episodes of Flip This House where the Montolongo Brothers in San Antonio, Texas would purchase dilapidated homes, spend a few weeks renovating them, and them would flip them for a profit. He told me what he was doing at his mortgage company was a combination of these two things only he had a "better mousetrap." He said that he was flipping homes worth hundreds of thousands of dollars and that the profits were higher as a result.

At the time my software company was on the verge of massive success. We were in negotiations with several large companies to install our software in thousands of locations worldwide, and the contracts were worth tens of millions of dollars. Despite this fact we had been limping along in terms of being able to financially cover our operating expenses. My board of directors consisted of five investors whose responsibility it was to contribute to capital calls as needed to cover these expenses until our sales were able to do so on their own.

One of my board members / investors - a guy who was my initial investor and to whom I had given a promissory note when he made his initial investment (I’ll call him Steve) – Steve and I had experienced a tumultuous business relationship due to the fact that he had had his attorney put a conversion clause into that promissory note that allowed him, without notice, to convert that “debt” to stock. Had he done so in the very beginning that would have made him sole owner of the company. As soon as I learned of its existence I had demanded that the note be replaced with one that did not have a conversion clause. That was two years earlier, in 2004. There had been a strong undertone of disdain ever since I had forced his hand that he never really got over. Despite this fact the company had moved forward.

Well in the beginning of 2006 there had been a need for several capital calls, and this had resulted in a rift in the company. The guy who owned the mortgage company (I’ll call him Greg) had promised to loan the company a large sum of money in exchange for a short-term, high-interest note in lieu of bringing in an outside investor and diluting everyone’s ownership by 5%. Only he failed to deliver on his promise, which caused the need for the capital calls. And not only did he do this but he refused to participate in the capital calls forcing Steve to pick up his percentage of the contribution. This infuriated Steve. Shortly thereafter Steve approached me and said he was going to execute his conversion clause and take 100% ownership of the company in order to get Greg out. I told him that not only would doing so not be right but that the conversion clause had been removed and no longer existed anyway. I pretty much just blew him off – but he kept bringing it up. He said he was going to do this to get rid of Greg.

The infighting had become a major distraction, and I had told Greg about Steve’s threats. So this was when Greg approached me with the idea of flipping several homes through his mortgage company as a way to generate money to be used to fund the company through to our next major contract so that there wouldn’t be a need for further capital calls. When he told me about the flipping opportunity I told him it just seemed too good to be true. I told him I was skeptical and didn’t want to get involved in something that I felt might not be legal. This is when he told me that his mortgage company was the safest mortgage company in the country and that there was absolutely NO possibility of anything illegal happening in his company. You see several years before he had started his mortgage company, while Greg was in college, he had been a DJ at many raves. This lifestyle had introduced him to Ecstasy and LSD drugs, and he had started selling them as a low-level dealer. This had landed him in the middle of a major federal drug case, and he had been convicted and had spent a few years in prison. After his release he was under the supervision of the federal probation department in what is called Post Release Supervision. He told me that the Mortgage Industry was wrought with fraud, and that when mortgage fraud occurs it is most often prosecuted in the federal justice system. Because of this he said that federal probation officers are well aware of what constitutes mortgage fraud and that his PO only allowed him to own / operate a large mortgage company with the stipulation that the federal probation office would have 100% access to every single transaction the company did. He told me that they provide access to his PO to every case file and that every single transaction was scrutinized.

This convinced me that there was no possibility that anything illegal was happening with these transactions, so I agreed to purchase five homes and to use the proceeds from those transactions to cover the operating expenses of the software company in lieu of further capital calls. I felt that this would be a good solution to the infighting and would allow me to remain focused on the massive amount of work I had on my plate to get us through to fruition.

Had I not been convinced that these transactions could not have involved anything illegal there is absolutely no way I would have agreed to do them. I would have simply insisted that my investors continue to fund the operations until one of the multimillion dollar contracts came through. At this time I had also sold 100% of my own equity in this company and had put the money I had received for doing so back into the company. I had negotiated with my partners that I would get 20% ownership back once we received contracts worth $1M. So it is totally illogical to believe I would have knowingly and intentionally committed a major felony that would have landed me in prison for decades a) knowing full well that the feds were looking closely at this mortgage company’s activities, and b) knowing that I could simply rely on my investors instead.

Moreover, there were numerous times when I was at Greg’s office when his PO would visit, and he seemed perfectly comfortable with everything that was going on. There were literally hundreds of transactions just like mine occurring every week at this company.

In the end I was the only person indicted. Even though I am the only person who could possibly NOT have known that these transactions were illegal I am the only person that has been indicted. And now the statute of limitations has lapsed, so I am the only person who ever WILL be indicted. These homes never were flipped. Instead he forced them into foreclosure leaving me in financial ruins. The multimillion dollar deals never came through because just before we closed our first deal Steve had approached me and said that he didn’t feel Greg should get 25% of a $20M contract so he was going to say he had executed his conversion clause before I had forced its removal and take control of the company as soon as we closed the deal. This caused me to believe that once he had control of the operating capital he would have unlimited resources with which to fight any legal attacks – so despite the fact that he would have been laughed out of court the chances of such litigation ever seeing the light of a courtroom was slim to none. I felt I needed to make a preemptive strike to keep him from doing this, so I met with Greg and told him I wanted to file a Motion for Declaratory Judgment from a local court to get them to say that Steve could not do what he was threatening to do. We met with Greg’s lawyer who told us it was not possible to ask a court to declare something illegal that hadn’t happened yet. So I asked if we could simply emulate the situation then and ask the court to declare what we had just done illegal and effectively also declaring that Steve could not do what he had been threatening to do.

So we did just that. We gave each other promissory notes with conversion clauses and converted them to stock, moved all of the assets to a temporary holding company, and filed a Motion for Declaratory Judgment asking the court to tell us we could not do this. Only this is where everything fell apart. Steve filed a countersuit (obviously he had no idea what we were really doing – he assumed we were trying to steal the company just as the multimillion dollar deal came through and beat him to the punch). We were told that we had to disclose the pending litigation to any company we were entering into agreements with which caused all of the pending deals to be put on hold. Then my homes went into foreclosure and we didn’t have the money to continue with the litigation I had started. In the end Steve got a default judgment against me, and my entire financial world fell to ruins.

So when the feds came knocking on my door and indicted me in July of 2011 I didn’t have the money to hire an attorney. Now I go to trial in a month in a fight for my life, and my public defender (not out of the FPD’s office but he is a CJA panel attorney) hasn’t even looked at my case yet as he has been involved in several murder trials in the year he has represented me. I found out through discovery that Steve had precipitated the criminal investigation by writing a 40-page diatribe to the FBI full of lies. I have a fairly strong case, but I am fearful that I will not be adequately represented at trial and that I may spend decades in a federal penitentiary.

Either way I am planning to write a book about this bizarre case and the entire story of my life.

Can you do a Cliff Notes version cause not many people are gonna go through all that to filter out what's pertinent.

Sounds like you will have plenty of time in prison to write your book.

LOL - Cliff Notes - I'm the only person indicted despite the fact that literally hundreds were investigated by the FBI and all were exactly the same as mine. Moreover, I was the only purchaser who was President / CEO of a software company that put me on a level where I could have possibly qualified for these homes. Most of the others were either unemployed, worked for the mortgage company, or were very questionable people in terms of their character. All did 3-5 home purchases.

I have a strong case to present to demonstrate my innocence - hopefully justice will prevail next month at trial.

I'd actually like to debate the quality of CJA panel attorney representation. When an indigent defendant is represented in the federal system by an attorney out of the Federal Public Defender's Office they have an investigator with unlimited resources who can travel across the country if necessary to interview various witnesses. And the attorney is also able to work with virtually unlimited resources with only the need to justify to his or her boss any given expense. Whereas CJA panel attorneys must have every single expense approved by the court who is very reluctant to approve anything. Despite that some 40 people should have been interviewed as possible witnesses in my case I was ultimately forced to choose the top 5-6 as the court limited our investigation to just 36 hours.

This is absurd. And my attorney will only get $9600 for taking my case to trial.

Another interesting tid-bit with my situation. My CJA panel attorney - he's a former 35-year prosecutor who refuses to accept that I am innocent. Once I accepted the notion that the federal probation office was scrutinizing every single mortgage transaction to assure nothing illegal was happening I felt comfortable.

Whenever something didn't seem right I would ask "Greg," and he would say, "oh, yes, this is standard practice and is perfectly legal." And in the Alice in Wonderland world of the sub-prime mortgage industry in 2006, where one could no longer rely on historical norms to determine what was right and wrong (stated incomes being accepted as just one example) I simply relied upon the professionals at the mortgage, lending, and title companies to assure that everything was legal.

Christ, the same title company did all five mortgage closings - and they were all within 90 days - so obviously they knew that there had been a previous transaction within the past three years and that each home could not have been my primary residence. We even have the lady who did three of the four closings for which I've been indicted who is going to testify to the fact that not only did I not read the documents, nor did she explain them to me (she just told me where to sign), but that she didn't even know what a primary residency clause was. And yet my attorney STILL refuses to believe that I didn't read the documents.

Anyway - thanks for sharing - I've been reading some of the other threads - interesting stuff.

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Oh - and my final post (unless someone wants to discuss more) - "Steve" is good friends with the Koch brothers and was recently overheard bragging to someone at the Mexican Food restaurant he owns that Charles helped him "get me in trouble" with the feds. So that has me a little concerned since my attorney told me he was asked by my judge as a "personal favor" to take my case. I honestly believe there is a good chance I am going to end up having to represent myself at trial or I will be railroaded by my prosecutorial defense attorney.

No one here can help you. Mortgage fraud is going to be a fairly complex set of facts and issues and you posted scant few relevant ones in your post. I tried to read it but kept having to jump around to try and find anything beyond the other guys were bad and I had no idea I was doing wrong. Your indictment has specific claims the government will try to prove. It seems they will easily prove all the facts except for your claim you had no intent to defraud. Intent is always the hardest thing to prove without specific statements from you. Did you ever talk to the feds? Was there anything you said that could lead to evidence you had the intent to defraud?

If not, they will use the facts and circumstances surrounding the events to show your intent. They will show you were in the middle of a scheme that was throwing a LOT of money around with a lot of promises and a lot of hiding the ball of where the money went and how it was accounted for. (I am surprised there is no tax issues involved with such a scheme.) They will say that anyone involved with such a complex set of events and representations made had to know precisely what was going on or willingly suspended knowing what was going on for benefit and that is enough to prove intent. (If a sketchy guy wants you to hide and sneak a "package" across the border, and you do not make a reasonable investigation about what is inside the package, do not think the government will be unable to prove you intended to smuggle drugs if you are caught.) Same here. You will need to show that asking "Greg" and accepting his answer and the fact some probation officer was involved in some way was a reasonable investigation. To me, that is nonsense. It is absurd to think one obtains a get out of jail free card by asking a co-conspirator and his probation officer if everything was all legal like and a pablum response of "standard practice and is perfectly legal" makes you good to go. Especially when you legally KNEW you were making FALSE representations. Signing a bunch of papers without reading them to obtain a bunch of money? Hmm...I am thinking that fits into my smuggling example pretty close.

That everyone else was doing it was not a good excuse in kindergarten. It is not going to be worth your attorney's breath at trial.

Obviously I'm not going to post every detail of my defense in this forum. But the fact that I was made to believe that there couldn't be anything illegal as well as the fact that he actually was under federal supervision are two very compelling points. And your attempt to simply dismiss the importance of both is meaningless to me. I am confident that the facts will bear out my innocence. The reality is that I had zero personal gain from these transactions as every penny either went to paying things associated with the home purchases (home improvements, utilities, mortgage payments, etc.) - none of which would have existed had I simply not done them - or to expenses of the software company which had I known or even suspected that these transactions were illegal I would have simply told my investors to continue to fund the operations. There was absolutely no reason for me to knowingly and intentionally commit a fraud to cover the expenses for a company I no longer had any ownership in merely to stop infighting when I could have simply insisted that the investors do their job - which was to fund the operations.

It's easy to sit behind the anonymity of a computer screen and play couch potato quarterback. At the end of the day I've been able to solidify a lot of strong evidence to substantiate the facts of what actually happened. As long as this trial isn't a kangaroo court trial where none of the evidence that supports my innocence is allowed in then I am confident I will be vindicated.

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Quoting Persecuted

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Obviously I'm not going to post every detail of my defense in this forum. But the fact that I was made to believe that there couldn't be anything illegal as well as the fact that he actually was under federal supervision are two very compelling points.

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Compelling? On what planet? "Made to believe", perhaps you mean you did not make a reasonable investigation. And, the fact he was "under federal supervision" is not going to be a factor in your favor, but against. You knew he was a criminal and you took his word everything was fine? Good luck with that. If that is your defense, I think you have a very large problem.

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And your attempt to simply dismiss the importance of both is meaningless to me.

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Obviously, your only chance is to prove you did not have the intent to defraud. With all you have written, you have not really made a clear case. And, that is without the other side bringing up some inconvenient facts you will have to explain.

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I am confident that the facts will bear out my innocence.

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Are you going to testify? Otherwise, your confidence means nothing. I suspect your attorney will not want you to testify.

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The reality is that I had zero personal gain from these transactions as every penny either went to paying things associated with the home purchases (home improvements, utilities, mortgage payments, etc.) - none of which would have existed had I simply not done them - or to expenses of the software company which had I known or even suspected that these transactions were illegal I would have simply told my investors to continue to fund the operations. There was absolutely no reason for me to knowingly and intentionally commit a fraud to cover the expenses for a company I no longer had any ownership in merely to stop infighting when I could have simply insisted that the investors do their job - which was to fund the operations.

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The reality is you hoped for personal gain. Just because you were caught before you made the gain does not take away your motive. That is unless your claim is you signed for multiple mortgages for a bunch of money because...well you really have not explained that have you? Why did you do it?

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It's easy to sit behind the anonymity of a computer screen and play couch potato quarterback. At the end of the day I've been able to solidify a lot of strong evidence to substantiate the facts of what actually happened. As long as this trial isn't a kangaroo court trial where none of the evidence that supports my innocence is allowed in then I am confident I will be vindicated.

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What is easy is to fool yourself into thinking that your failure to properly investigate the scheme is not what the courts call "willful blindness". Do I think you KNEW you were defrauding others? I do not really know. I know you had suspicions along the way, but I do not know. Do I think you did what a reasonable person would do in like circumstances to make certain you were not? No. You were signing too many papers and making too many representations for too much money with too many odd interactions of money flow to not investigate further.

But, consider the facts you know without sharing for yourself against the law:
http://scholarship.law.wm.edu/cgi/vi...ontext=facpubs

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)?

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.

"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.

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.

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.

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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.

My attorney says if I don't testify I will lose. So how does that affect your opinion of him?

And I was a very well respected person in my industry who was worth ten times what I was earning, and there are industry icons who will testify to this fact - people who have made billions of dollars. You, like the prosecution, are making a LOT of false assumptions.

And I am justifiably paranoid. There are things I know as factual about this prosecution that warrant such paranoia.

Here is one example of why I don't trust my attorney. Every single thing I have brought to him to demonstrate my innocence he has argued won't be allowed in for one reason or another, and every single time I have been able to prove him wrong. I wanted "Steve's" emails and recordings of our meetings subpoenaed and he told me the court would never grant such a motion. So I wrote my own Motion for Issuance of Subpoena Duces Tecum - and guess what - the judge granted my motion. I now have these emails and these recordings, which substantiate everything I've stated all along.

You insist on the argument that an intelligent person who is guilty of trusting someone must be guilty of being involved in a fraudulent scheme. I'm telling you that I can demonstrate CLEARLY that I was a victim of this scheme - both factually and logically.

My only concern at this point is how deep to Charles Koch's influences in this matter run. And just because he is "Steve's" friend would he really pull those strings to get me convicted (and how could that be possible?) or was he merely instrumental in getting me prosecuted? Or is this even true? I know there is also the possibility that Steve planted this information just to mess with my head - something that is definitely working at this point. Obviously now I don't know who to trust.

I stand firmly on the knowledge that I am truly innocent. I also know that there is a strong possibility that I may end up in prison despite that fact.

Here is an interesting question for debate:

Historically lenders wanted to know if a home purchase was a primary residence or if there had been another transaction in the previous three years in order to assess the risk factor associated with any given real estate transaction. However, in 2006 the climate of the mortgage industry was such that lenders simply wanted to close as many transactions as possible so that they could bundle the mortgages into MBS's - in reality they no longer even cared about the viability of a given mortgage. Have you seen Too Big to Fail? There is a really great scene where this is explained - you can see it here- https://www.youtube.com/watch?v=jBbNVxnIm7w -

Obviously this doesn't really change the fact of whether something was true or not. But my argument is that the lenders actually perpetuated the environment for fraud by changing the rules and blurring the lines between right and wrong such that title companies and mortgage brokers began to do exactly what happened in my case - they would intentionally get unsuspecting purchasers to sign things that THEY knew to be untrue in order to close on these "shit-bag mortgages."

So should a person who relied on the ethics and professionalism of those at the mortgage companies, title companies, and lending companies where things were clearly done at these companies that were fraudulent but that the buyer could have had no way of knowing about - should that person be subjected to prosecution? Particularly where nobody at any of these companies faced similar prosecution?

Well OP, if I was the trier of fact I would be asking myself (after just reading this thread), How is it that a man smart enough and capable enough to found and build a software company with potential worth of tens of millions of dollars not know what he was signing in the mortgage scheme? It may be true that you didn't read the documents, but who would believe that?

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Here is one example of why I don't trust my attorney. Every single thing I have brought to him to demonstrate my innocence he has argued won't be allowed in for one reason or another, and every single time I have been able to prove him wrong. I wanted "Steve's" emails and recordings of our meetings subpoenaed and he told me the court would never grant such a motion. So I wrote my own Motion for Issuance of Subpoena Duces Tecum - and guess what - the judge granted my motion. I now have these emails and these recordings, which substantiate everything I've stated all along

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You may think that all the emails and recordings that you got of your meetings with Steve is relevant to your innocence but it has nothing to do with the crimes you have been indicted for and I would agree with your attorney that they will be objected to and not be allowed at trial. No one really cares why you did what you did but only that you did do it. And to that, you have already acknowledged the signing of 4 fraudulent mortgages.

You should think long and hard about a deal that could save you 16 years of incarceration.

Not my opinion of him, but of the case. If your attorney feels your only chance is your testimony, it means he feels the prosecutor has enough evidence of intent and you are the only possibility to have it come into a reasonable doubt.

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And I was a very well respected person in my industry who was worth ten times what I was earning, and there are industry icons who will testify to this fact - people who have made billions of dollars. You, like the prosecution, are making a LOT of false assumptions.

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And, you did not know what you were doing was illegal? You did not know you should not sign important papers that you did not know what they contained or their meaning? You did not know how loans work? It seems to me your only chance here is to show you were smart enough to legitimately earn a six figure salary while simultaneously being stupid enough to not know basic finance of the type all home owners in America must know. That you claim that you are a very well respected person in your industry is not going to be a good thing for you from my point of view. Remember, all they need to prove is "reckless indifference".

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And I am justifiably paranoid. There are things I know as factual about this prosecution that warrant such paranoia.

Here is one example of why I don't trust my attorney. Every single thing I have brought to him to demonstrate my innocence he has argued won't be allowed in for one reason or another, and every single time I have been able to prove him wrong. I wanted "Steve's" emails and recordings of our meetings subpoenaed and he told me the court would never grant such a motion. So I wrote my own Motion for Issuance of Subpoena Duces Tecum - and guess what - the judge granted my motion. I now have these emails and these recordings, which substantiate everything I've stated all along.

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They have not been admitted. They have only been discovered. You have not proven your attorney wrong yet.

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You insist on the argument that an intelligent person who is guilty of trusting someone must be guilty of being involved in a fraudulent scheme. I'm telling you that I can demonstrate CLEARLY that I was a victim of this scheme - both factually and logically.

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It is not a matter of trusting someone. It is a matter of trusting a person who is a co-conspirator when the things being asked for you to do do not pass the smell test. Even you had concerns and asked him about them. You took his representations as fact when a person could type into Google (Back then, maybe Alta Vista) "mortgage fraud" and see how the exact things you were doing are considered fraud. You did not have access to the internet?

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I stand firmly on the knowledge that I am truly innocent. I also know that there is a strong possibility that I may end up in prison despite that fact.

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You are not truly innocent. Ignorance of the law is no excuse.

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So should a person who relied on the ethics and professionalism of those at the mortgage companies, title companies, and lending companies where things were clearly done at these companies that were fraudulent but that the buyer could have had no way of knowing about - should that person be subjected to prosecution? Particularly where nobody at any of these companies faced similar prosecution?

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You are the one who made the representations. You were the one who manipulated facts to make them appear as something that was not true. You. When you say you had "no way of knowing about" that is simply false. You check it out. Simply asking the guy who you suspect of tricking you is not really checking it out. Maybe a normal home buyer who does this once could get away with such an argument. Maybe. You did not do it once, you did it multiple times for a lot of money. At some point you have to take responsibility for YOUR actions. Even if you think others are getting away with things.

This bulletin may help you understand what the government needs to do:
http://www.justice.gov/usao/eousa/fo...m/usab6104.pdf

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Quoting budwad

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You may think that all the emails and recordings that you got of your meetings with Steve is relevant to your innocence but it has nothing to do with the crimes you have been indicted for and I would agree with your attorney that they will be objected to and not be allowed at trial.

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Laughable. Again - more false assumptions. How do you know that these have nothing to do with what I've been indicted for? As it happens you are wrong. The recordings of the meetings include Greg's presentation to the board of his proposal that I do the home flips as a stop-gap measure in lieu of capital calls - and the well respected realtor on our board asked a few questions and was satisfied that these transactions would be legal - even to the point that he was willing to allow the proceeds from these mortgage transactions to be used to fund our operations - obviously anyone who thought these would be illegal would not have allowed that to happen as this would have subjected our company to seizure and forfeiture.

Ask anyone who has purchased a home in the past two decades and unless they are an attorney MOST will tell you they didn't read the documents - here are two articles that support this fact:

http://articles.chicagotribune.com/2...atement-lender

http://www.chicagomag.com/Radar/Deal...ng-Study-Says/

The fact is that I trusted the professionals to assure that these documents were correct. Despite what every one of you attorneys say any normal person would relate to the fact that it is the responsibility of the title company to assure things are legal. How can a lay person be expected to find something that isn't? That is totally absurd.

And if a person who is purchasing a home for 20 or 30 years doesn't read the documents why would someone who is purchasing a home they expected to own less than 90 days? At the end of the day what matters is that I did not know that anything was illegal - I did NOT "knowingly and intentionally" engage in fraud. And I did as much due diligence as I could do - I had conversations with a realtor on our board who was satisfied that these were legal. And on top of the fact that I knew that the probation office was reviewing these transactions (I even saw a letter to his PO discussing this) I was made to believe there could not be anything illegal happening in these transactions. That is a far cry from knowingly and intentionally committing a fraud and is the polar opposite of deliberate ignorance.

And Welfarelvr - it was even discussed at these meetings that the sole reason for doing these mortgages was to cover the costs of the company in lieu of capital calls. None of my investors had refused to do the capital calls - it was just that there was this infighting between Greg and Steve that had caused a distraction - but there was absolutely ZERO reason for me to do something I knew to be illegal to cover expenses when I had five people whose sole responsibility in this venture was to fund the operations when the contracts did not do so. It completely defies logic that I would commit a crime to cover these costs instead of relying on my investors to do so.

I'm not sure why you people seem to get off on telling people they are guilty. It seems to be some sort of mental disorder among attorneys or people in the criminal legal system - you people just WANT to assume everyone who is charged with a crime is guilty. It's pathetic, really.

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Quoting Persecuted

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Laughable. Again - more false assumptions. How do you know that these have nothing to do with what I've been indicted for? As it happens you are wrong. The recordings of the meetings include Greg's presentation to the board of his proposal that I do the home flips as a stop-gap measure in lieu of capital calls - and the well respected realtor on our board asked a few questions and was satisfied that these transactions would be legal - even to the point that he was willing to allow the proceeds from these mortgage transactions to be used to fund our operations - obviously anyone who thought these would be illegal would not have allowed that to happen as this would have subjected our company to seizure and forfeiture.

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None of them were signing the papers, and none of them were advising you in a professional capacity, therefore none of them are liable for the mistakes you made.

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Quoting Persecuted

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The fact is that I trusted the professionals to assure that these documents were correct. Despite what every one of you attorneys say any normal person would relate to the fact that it is the responsibility of the title company to assure things are legal. How can a lay person be expected to find something that isn't? That is totally absurd.

And if a person who is purchasing a home for 20 or 30 years doesn't read the documents why would someone who is purchasing a home they expected to own less than 90 days? At the end of the day what matters is that I did not know that anything was illegal - I did NOT "knowingly and intentionally" engage in fraud. And I did as much due diligence as I could do - I had conversations with a realtor on our board who was satisfied that these were legal. And on top of the fact that I knew that the probation office was reviewing these transactions (I even saw a letter to his PO discussing this) I was made to believe there could not be anything illegal happening in these transactions. That is a far cry from knowingly and intentionally committing a fraud and is the polar opposite of deliberate ignorance.

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If I was starting a business venture making myself liable for millions of dollars worth of loans you can bet your ass I would have read the paperwork and known what I was signing. If you didn't want to read the paperwork and so the work yourself then you should have hired a competent attorney to assist you. The fact you chose not to does not make you innocent. The fact that you were didn't know what you were doing was wrong doesn't make it less wrong.

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Quoting Persecuted

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It completely defies logic that I would commit a crime to cover these costs instead of relying on my investors to do so.

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I think that plenty of people would agree that it defies logic that you would commit this crime when you were apparently on the brink of a huge financial gain from your software company. However humans are notoriously illogical, criminals even more so. You seem to feel that the fact that this wasn't logical means you aren't guilty of it, however that couldn't be further from the truth.

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Quoting Persecuted

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I'm not sure why you people seem to get off on telling people they are guilty. It seems to be some sort of mental disorder among attorneys or people in the criminal legal system - you people just WANT to assume everyone who is charged with a crime is guilty. It's pathetic, really.

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What you outlined in your first post constitutes mortgage fraud, we are only assuming you are guilty because you told us what you did and we can see that that is illegal, regardless of how illogical it may be or what your board of directors may have said.

Seems like we'll have to agree to disagree.

Federal Mortgage and Wire Fraud are NOT Strict Liability Crimes

In law, strict liability is a standard for liability which may exist in either a criminal or civil context. A rule specifying strict liability makes a person legally responsible for the damage and loss caused by his or her acts and omissions regardless of culpability (including fault in criminal law terms, typically the presence of mens rea). Strict liability is prominent in tort law (especially product liability), corporations law, and criminal law.

Strict Liability in Criminal Law

The concept of strict liability is found in criminal law, though the same or similar concept may appear in contexts where the term itself is not used. Strict liability often applies to vehicular traffic offenses. In a speeding case, for example, whether the defendant knew that the posted speed limit was being exceeded is irrelevant. The prosecutor would need to prove only that the defendant was operating the vehicle in excess of the speed limit.

Strict liability can be determined by looking at the intent of the legislature. If the legislature seems to have purposefully left out a mental state element (mens rea) because they felt mental state need not be proven, it is treated as a strict liability. However, when a statute is silent as to the mental state (mens rea) and it is not clear that the legislature purposely left it out, the ordinary presumption is that a mental state is required for criminal liability. When no mens rea is specified, under the Model Penal Code or MPC, the default mens rea requirement is recklessness, which the MPC defines as "when a person consciously disregards a substantial and unjustifiable risk with respect to a material element".[1]

Strict liability laws can also prevent defendants from raising diminished mental capacity defenses, since intent does not need to be proven.[2]

Since the federal statute for wire fraud, 18 USC 1343, plainly states an element of intent wire fraud is clearly not a strict liability crime.

18 U.S.C. 1343—Elements of Wire Fraud

The elements of wire fraud under Section 1343 directly parallel those of the mail fraud statute, but require the use of an interstate telephone call or electronic communication made in furtherance of the scheme. United States v. Briscoe, 65 F.3d 576, 583 (7th Cir. 1995) (citing United States v. Ames Sintering Co., 927 F.2d 232, 234 (6th Cir. 1990) (per curiam)); United States v. Frey, 42 F.3d 795, 797 (3d Cir. 1994) (wire fraud is identical to mail fraud statute except that it speaks of communications transmitted by wire); see also, e.g., United States v. Profit, 49 F.3d 404, 406 n. 1 (8th Cir.) (the four essential elements of the crime of wire fraud are: (1) that the defendant voluntarily and intentionally devised or participated in a scheme to defraud another out of money; (2) that the defendant did so with the intent to defraud; (3) that it was reasonably foreseeable that interstate wire communications would be used; and (4) that interstate wire communications were in fact used) (citing Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit 6.18.1341 (West 1994)), cert. denied, 115 S.Ct. 2289 (1995); United States v. Hanson, 41 F.3d 580, 583 (10th Cir. 1994) (two elements comprise the crime of wire fraud: (1) a scheme or artifice to defraud; and (2) use of interstate wire communication to facilitate that scheme); United States v. Faulkner, 17 F.3d 745, 771 (5th Cir. 1994) (essential elements of wire fraud are: (1) a scheme to defraud and (2) the use of, or causing the use of, interstate wire communications to execute the scheme), cert. denied, 115 S.Ct. 193 (1995); United States v. Cassiere, 4 F.3d 1006 (1st Cir. 1993) (to prove wire fraud government must show (1) scheme to defraud by means of false pretenses, (2) defendant's knowing and willful participation in scheme with intent to defraud, and (3) use of interstate wire communications in furtherance of scheme); United States v. Maxwell, 920 F.2d 1028, 1035 (D.C. Cir. 1990) ("Wire fraud requires proof of (1) a scheme to defraud; and (2) the use of an interstate wire communication to further the scheme."). [3]

[1] Lee, Cynthia (2009). Criminal Law Cases and Materials. F. Strict Liability Crimes: WEST A Thomas Reuters Business. pp. 219–221;989. ISBN [[Special:BookSources/978-0-314-19880-5|978-0-314-19880-5]].
[2] Joel Samaha (briefed by) (June 9, 2001). "Garnett v. State". Department of Sociology at the University of Minnesota. Retrieved September 14, 2011.
[3] http://www.justice.gov/usao/eousa/fo...itle9/crm00941...

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Strict Liability in Criminal Law

The concept of strict liability is found in criminal law, though the same or similar concept may appear in contexts where the term itself is not used. Strict liability often applies to vehicular traffic offenses. In a speeding case, for example, whether the defendant knew that the posted speed limit was being exceeded is irrelevant. The prosecutor would need to prove only that the defendant was operating the vehicle in excess of the speed limit.

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Here is where the problem with your argument comes in. You DID from what you have told us intentionally and willfully scheme to defraud. You signed the paper work to acquire mortgages for a primary residence with the intent to flip them, in order to secure a lower interest rate. This is illegal, the fact that you didn't know it was illegal does not make it legal. Strict liability comes into play if you didn't know that the mortgage company was doing something illegal, not that you knowingly did something illegal while thinking it is legal.

To flip your example around, if strict liability did not apply to speeding and speeding was only a crime if to willfully and knowingly violated the speed limit then you may have an argument if your car speedometer was defective, you would not have a defense if you knew you were driving 100 MPH, despite the speed limit being 65.

When it comes to liability ignorance of actions taken (i.e. not knowing what happened) is a defense, however ignorance of the law (i.e. knowing what happened but not knowing it was illegal) is not a defense. You knew what the loans were, you have already told us enough to make that clear, whether or not you knew what you were doing was illegal is irrelevant.

Brown - you are completely misrepresenting the facts.

I have never stated anything of the sort of what you just said.

First - in the recordings of the meetings where we discussed the mortgages I stated repeatedly that if they did not vote to increase my salary allowing me to legally qualify for these mortgages then I would not do them because I refused to sign something that was not true. This is strongly demonstrative of my state of mind - that I REFUSED to sign something that was not true.

I could completely agree with you if the person doing the closings stated that she explained to me that I was signing something that said I hadn't done another transaction in the previous 3 years or that each home was my primary residence. She has in fact stated the opposite of that - she did NOT explain these things to me. We had literally 30 minutes to do each closing and she simply put these two huge stacks of documents in front of me and told me where to sign - she has even stated that SHE didn't even know what these things were. She will testify that she told me where to sign and that is what I did. She will also testify to the fact that my transactions were the same as every other she did even in the many instances where buyers were buying multiple properties within a short period of time.

My point is that had someone told me that these things were in the documents I would have said, "hey, I can't sign something that says I haven't done a transaction in the past three years since we just closed on one last week" or something to that effect. I would NEVER have knowingly signed something I knew was not true. And can be heard in these tapes saying this over and over.

You are insinuating that I "signed the paper work to acquire mortgages for a primary residence with the intent to flip them, in order to secure a lower interest rate" but that is completely false - as are 99% of the other assumptions being made throughout this discussion here.

This is a total waste of my time. I thought I could possibly bounce some things off of some sharp legal minds here - apparently that too was a false assumption.

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Quoting Persecuted

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I could completely agree with you if the person doing the closings stated that she explained to me that I was signing something that said I hadn't done another transaction in the previous 3 years or that each home was my primary residence. She has in fact stated the opposite of that - she did NOT explain these things to me. We had literally 30 minutes to do each closing and she simply put these two huge stacks of documents in front of me and told me where to sign - she has even stated that SHE didn't even know what these things were. She will testify that she told me where to sign and that is what I did. She will also testify to the fact that my transactions were the same as every other she did even in the many instances where buyers were buying multiple properties within a short period of time.

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The person doing the closing was hired by you and was working for you (she may have been selected by the mortgage company but that was done on your behalf), the fact that she said she didn't know what paper work meant is only going to look worse for you. You hired someone to review the paperwork and have you sign it, she didn't understand the paperwork, yet you still signed it. It would help your case more if she understood the paperwork and mislead you. The fact that you signed paperwork handed to you be someone who didn't know what it meant is incredibly unbelievable, especially for someone who was at the time was by his own account an industry leading CEO. I have purchased multiple properties, and my closing agent/title insurer is also my (trusted) real estate attorney, the fact that you were using some one who was incompetent and that you after being told that the closing agent didn't understand the paperwork agreed to sign the contract is not a defense that will ever hold up.

Look, I think we agree intent is the only thing you have to argue. I have repeatedly shown how they will attempt to prove you had the intent to defraud. Because fraud is a specific intent crime, it is even a little harder to prove than in some other contexts. But, you are simply not looking at things from a neutral viewpoint.

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Quoting Persecuted

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And Welfarelvr - it was even discussed at these meetings that the sole reason for doing these mortgages was to cover the costs of the company in lieu of capital calls. None of my investors had refused to do the capital calls - it was just that there was this infighting between Greg and Steve that had caused a distraction - but there was absolutely ZERO reason for me to do something I knew to be illegal to cover expenses when I had five people whose sole responsibility in this venture was to fund the operations when the contracts did not do so. It completely defies logic that I would commit a crime to cover these costs instead of relying on my investors to do so.

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So, you got mortgages through false pretenses to fund the company paying you.

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First - in the recordings of the meetings where we discussed the mortgages I stated repeatedly that if they did not vote to increase my salary allowing me to legally qualify for these mortgages then I would not do them because I refused to sign something that was not true. This is strongly demonstrative of my state of mind - that I REFUSED to sign something that was not true.

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Or, from a different perspective, you refused to be a part of the scheme unless they raised your salary.

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I could completely agree with you if the person doing the closings stated that she explained to me that I was signing something that said I hadn't done another transaction in the previous 3 years or that each home was my primary residence. She has in fact stated the opposite of that - she did NOT explain these things to me. We had literally 30 minutes to do each closing and she simply put these two huge stacks of documents in front of me and told me where to sign - she has even stated that SHE didn't even know what these things were. She will testify that she told me where to sign and that is what I did. She will also testify to the fact that my transactions were the same as every other she did even in the many instances where buyers were buying multiple properties within a short period of time.

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Why do you think it is her job to do so? She is not your attorney. She is not required to know what you are signing. As I have repeatedly wrote, it is your job to know what you are signing. A legal presumption under the law will be you knew what was the effect of what you were signing. That is how contracts work. Even clicking the button on the screen with a long list of requirements on another screen makes you legally responsible for all those other things in some jurisdictions. Now, you can rebut the presumption if you can. It will take more than your word.

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My point is that had someone told me that these things were in the documents I would have said, "hey, I can't sign something that says I haven't done a transaction in the past three years since we just closed on one last week" or something to that effect. I would NEVER have knowingly signed something I knew was not true. And can be heard in these tapes saying this over and over.

You are insinuating that I "signed the paper work to acquire mortgages for a primary residence with the intent to flip them, in order to secure a lower interest rate" but that is completely false - as are 99% of the other assumptions being made throughout this discussion here.

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Insinuating? You have said it. You did sign the paperwork. You did sign knowing it was for a primary residence and then you did some things to make it appear as though it was your primary residence even though it was not. You claim you did not know it was to secure a lower interest rate. Fine. What did you think claiming it was your primary residence was supposed to do?

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This is a total waste of my time. I thought I could possibly bounce some things off of some sharp legal minds here - apparently that too was a false assumption.

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What did you want to bounce? It seems you keep making claims and we show you the problems. What is it you expected? For us to tell you that you have a slam dunk, get rid of your attorney and blame the Koch's to get yourself out from under this?

You have a problem, as you know. It seems your only hope is to get in front of a jury and try to get them to see the innocence in your eyes and voice regarding what seems a mountain of evidence against you in the attempt to prove you did not have the intent to defraud. You will need to do this with straight forward statements and reasonable explanations for each piece of the mountain in the hope you can convince the jury there is a reasonable doubt about your intent. Asking why or arguing the logic is worthless as everything can be explained from a profit motive and hope to not get caught. You have got to look them in the eye and convince them because your words are not helping you much. I would make sure you have an attorney who can object in your cross-examination or you will not have any chance at all.

First of all - there is no way anything about the Koch's will ever be mentioned in anything. I've repeatedly stated that despite my innocence I will probably be spending a long time in prison. I can honestly sit here and tell you that a) I did not know anything about these transactions was illegal, b) had I known that anything in the mortgage documents was false I would not have signed it, and c) my life has already been ruined because of this mess.

A final clarification - I never said I knew anything about a primary residence. Greg simply indicated things that needed to happen in order for these transactions to be legal (salary increase, living in each home for a period of time, etc) and I did each of the things I was told I needed to do. I did not receive a dime from these transactions.

Anyway - it's pretty pointless to continue to convince you people of anything since I'm not going to share all of the details anyway. I just learned that the trial date has been moved (yet again) to August, so I guess I'll have more time to fine tune my defense strategy.

This is me deleting my account...

I pointed out before that you should not post details about your case, lest a prosecutor find your thread. The more you say, the more likely it is that your statements will be useful for the prosecutor. And yet you keep posting.

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I told him I was skeptical and didn’t want to get involved in something that I felt might not be legal. This is when he told me that his mortgage company was the safest mortgage company in the country and that there was absolutely NO possibility of anything illegal happening in his company. You see several years before he had started his mortgage company, while Greg was in college, he had been a DJ at many raves. This lifestyle had introduced him to Ecstasy and LSD drugs, and he had started selling them as a low-level dealer. This had landed him in the middle of a major federal drug case, and he had been convicted and had spent a few years in prison. After his release he was under the supervision of the federal probation department in what is called Post Release Supervision. He told me that the Mortgage Industry was wrought with fraud, and that when mortgage fraud occurs it is most often prosecuted in the federal justice system. Because of this he said that federal probation officers are well aware of what constitutes mortgage fraud and that his PO only allowed him to own / operate a large mortgage company with the stipulation that the federal probation office would have 100% access to every single transaction the company did. He told me that they provide access to his PO to every case file and that every single transaction was scrutinized.

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So your excuse for not following your instinct is that you were sold a bill of goods by a convicted drug dealer, about how federal probation officers are experts in mortgage law? 'Greg' must have been thinking, "Sucker!"

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This convinced me that there was no possibility that anything illegal was happening with these transactions, so I agreed to purchase five homes and to use the proceeds from those transactions to cover the operating expenses of the software company in lieu of further capital calls.

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So it's like John DeLorean and the cocaine, except you believed what you were doing was legal?

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Had I not been convinced that these transactions could not have involved anything illegal there is absolutely no way I would have agreed to do them. I would have simply insisted that my investors continue to fund the operations until one of the multimillion dollar contracts came through.

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It would have been sensible for you to do your due diligence with a real estate lawyer, rather than taking the claims of convicted felon at face value.

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So it is totally illogical to believe I would have knowingly and intentionally committed a major felony that would have landed me in prison for decades a) knowing full well that the feds were looking closely at this mortgage company’s activities, and b) knowing that I could simply rely on my investors instead.

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It would have been easier for you to rely on your investors instead. You are free to try to convince the jury that they were standing by, eager to hand the company more money. But that only raises the question, "Whatever you knew, why didn't you choose the easy money over the mortgage fraud?"

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Moreover, there were numerous times when I was at Greg’s office when his PO would visit, and he seemed perfectly comfortable with everything that was going on.

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I would love to learn more about the probation officer who spends most of his time hanging out with a probationer at the probationer's business office. Most probation officers don't have the time for frequent social calls.

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There were literally hundreds of transactions just like mine occurring every week at this company.

In the end I was the only person indicted.

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These hundreds of transactions per week included the exact same type of misrepresentations you made to the lenders? Perhaps the other people were more careful. Perhaps Greg really is as careful as you claim, and it was your own mistakes that made you unique.

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These homes never were flipped. Instead he forced them into foreclosure leaving me in financial ruins.

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Who is "he" and how did "he" do that?

Perhaps it was your default that caused you to be investigated, as opposed to other transactions that did not involve default.

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Steve filed a countersuit (obviously he had no idea what we were really doing – he assumed we were trying to steal the company just as the multimillion dollar deal came through and beat him to the punch). We were told that we had to disclose the pending litigation to any company we were entering into agreements with which caused all of the pending deals to be put on hold. Then my homes went into foreclosure and we didn’t have the money to continue with the litigation I had started. In the end Steve got a default judgment against me, and my entire financial world fell to ruins.

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I thought the homes had previously been "forced" into foreclosure, but I guess not. If you didn't want Steve to infer that you were up to not good, it is a shame you didn't clue Steve into your plans before surprising him with the lawsuit.

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Despite that some 40 people should have been interviewed as possible witnesses in my case I was ultimately forced to choose the top 5-6 as the court limited our investigation to just 36 hours.

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Is your dialing finger broken? Is there some reason you can't speak to any of these witnesses yourself, and pass notes to your lawyer?

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Whenever something didn't seem right I would ask "Greg," and he would say, "oh, yes, this is standard practice and is perfectly legal."

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That's understandable. After all, whenever I have questions about the legality of something, I search out a convicted drug dealer who is positioned to profit from the transaction and ask him, "Is this really legal?" If he says "Yes", I just shut of my brain and forge ahead!

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And in the Alice in Wonderland world of the sub-prime mortgage industry in 2006, where one could no longer rely on historical norms to determine what was right and wrong (stated incomes being accepted as just one example) I simply relied upon the professionals at the mortgage, lending, and title companies to assure that everything was legal.

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No, really, you could rely upon historical norms. Lying about your income is lying about your income, even if everybody seems to be doing it.

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Christ, the same title company did all five mortgage closings - and they were all within 90 days - so obviously they knew that there had been a previous transaction within the past three years and that each home could not have been my primary residence.

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And so did you. Was that one of the "norms" you thought was no longer applicable?

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We even have the lady who did three of the four closings for which I've been indicted who is going to testify to the fact that not only did I not read the documents, nor did she explain them to me (she just told me where to sign), but that she didn't even know what a primary residency clause was.

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I don't know how the woman would know what was going on inside your head, but it's your responsibility to hire competent help. It's your responsibility to make sure your helper has accurate information to put into the documents. It's also your responsibility to review documents for accuracy before you sign them.

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And yet my attorney STILL refuses to believe that I didn't read the documents.

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You signed them, no?

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"Steve" is good friends with the Koch brothers and was recently overheard bragging to someone at the Mexican Food restaurant he owns that Charles helped him "get me in trouble" with the feds.

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If rumors about what was supposedly said at a Mexican restaurant are to be believed, maybe he tipped off the feds to the real estate scheme when you engaged in actions that made him think you were trying to steal his share of the business.

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Obviously I'm not going to post every detail of my defense in this forum. But the fact that I was made to believe that there couldn't be anything illegal as well as the fact that he actually was under federal supervision are two very compelling points.

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Had you heard that from your real estate lawyer, somebody well versed in mortgage law, that might be compelling. Hearing it from a convicted drug dealer, who insists that federal probation officers are experts in mortgage law and scrutinize hundreds of transactions per week for any sign of illegality? Not so much. As evidence of gullibility, perhaps.

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The reality is that I had zero personal gain from these transactions as every penny either went to paying things associated with the home purchases (home improvements, utilities, mortgage payments, etc.) - none of which would have existed had I simply not done them - or to expenses of the software company which had I known or even suspected that these transactions were illegal I would have simply told my investors to continue to fund the operations.

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So in the process of flipping homes, you managed to extract considerable amounts of money to fund your business. It follows that you either borrowed considerably more money than you required to purchase and rehab the homes, so as to be able to extract that money, or you borrowed enough money to acquire the homes and to rehab them but diverted the money to the business. Either way, I can see why a lender would call it fraud. Is there a third, innocent explanation that I've overlooked?

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There was absolutely no reason for me to knowingly and intentionally commit a fraud to cover the expenses for a company I no longer had any ownership in merely to stop infighting when I could have simply insisted that the investors do their job - which was to fund the operations.

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And if I accept that argument, the question becomes, "Then why did you do it?" Which I expect is getting us to why your lawyer believes you need to testify if you want a chance of avoiding conviction.

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The recordings of the meetings include Greg's presentation to the board of his proposal that I do the home flips as a stop-gap measure in lieu of capital calls - and the well respected realtor on our board asked a few questions and was satisfied that these transactions would be legal - even to the point that he was willing to allow the proceeds from these mortgage transactions to be used to fund our operations - obviously anyone who thought these would be illegal would not have allowed that to happen as this would have subjected our company to seizure and forfeiture.

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Should the discussion be found admissible, I expect that the prosecutor will have a different interpretation of the statements, or of the answers to the real estate agent's questions that reassured him. Note also, a real estate agent is not a mortgage law expert. They're not a substitute for having a real estate lawyer review your contracts, they don't write or underwrite mortgages, they don't handle closings....

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Ask anyone who has purchased a home in the past two decades and unless they are an attorney MOST will tell you they didn't read the documents - here are two articles that support this fact:...

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There's a huge difference between not reading the documents in toto, and claiming to be unaware of the inaccurate information you (directly or through your agent) put on the application form prior to signing it.

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Despite what every one of you attorneys say any normal person would relate to the fact that it is the responsibility of the title company to assure things are legal.

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No, it is not the responsibility of the title company to audit your mortgage application.

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How can a lay person be expected to find something that isn't?

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Except you did know. You simply chose to believe absurd stories about mortgage law expert probation officers, and to convince yourself that old "norms" about filling out mortgage applications truthfully were no longer relevant.

It also seems unlikely that part of your disclosure to the real estate agent who was "satisfied" by your representations was informed that (a) your mortgage applications were not truthful, (b) you were not going to review any of the paperwork for the financial transactions prior to signing your name, and (c) you didn't feel that you had any responsibility to ensure that the information you provided on the mortgage applications was truthful. Given that you claim you didn't know that your applications were not truthful, and given that there would be a roughly zero percent chance of the board giving its blessing to anything that involved untruthful applications and unreviewed contracts, I'm not seeing that the conversation is going to be of as much use to you as you believe.

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And I did as much due diligence as I could do...

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No, you didn't. As an obvious example, you claim that you didn't even read the mortgage applications you signed.

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...but there was absolutely ZERO reason for me to do something I knew to be illegal to cover expenses when I had five people whose sole responsibility in this venture was to fund the operations when the contracts did not do so.

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Then it's unfortunate that you made false statements on your mortgage applications, leading the lenders, FBI and U.S. Attorney's Office to conclude that you intentionally did something illegal.

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I'm not sure why you people seem to get off on telling people they are guilty.

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Hey, for all I know you need a squeegee to periodically wipe the drool off of your keyboard, but.... You're bright enough that you knew that the deal was too good to be true from the time it was first pitched to you, you're making excuses about "new norms" that seem to be a thin justification for knowingly filing false information on your mortgage applications (even as you claim that somebody else filled in the information and you chose not to review it), and it appears that you pulled a lot of money out of the mortgage proceeds for business purposes even though there's no chance that the banks lending the money would have done so had they known of your intent. So it's more than fair to say that things don't look good.

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It seems to be some sort of mental disorder among attorneys or people in the criminal legal system - you people just WANT to assume everyone who is charged with a crime is guilty. It's pathetic, really.

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You don't need to assume that most people who are charged with crimes are guilty, as it happens to be a fact. Nobody is disputing that some people are charged with crimes they did not commit, and nobody is disputing that many others are overcharged. But here's the thing: We're not going to ignore that huge, black cloud hanging over your head, merely because you insist that you see nothing but sunshine. It's ominous.

Getting back to my earlier point.... A simple Google search leads me to press releases about mortgage fraud indictments from July, 2011. I see a case on the first page of results that matches the information you've shared here pretty closely. (If so, the reference to your unindicted co-conspirators makes me wonder if some are testifying for the prosecution.) If you are among the individuals whose indictments are mentioned on that page, think long and hard about how easy it is to connect you up with the indictment despite having only cursory information. FBI agents know how to use Google.

Your thread title is "conspiracy to commit mortgage fraud" and you said in the first post that it was what you were indicted for. So who is the unindicted conspirator if you know? And why weren't they indicted, grants of immunity perhaps? I assume you were also indicted for mortgage fraud in a separate count?

Most of what you have written goes to the defense of mortgage fraud intent but I think it pretty much makes the conspiracy case.

Is it true or false that they have to find you guilty of mortgage fraud to find you guilty of conspiracy?

BTW this thread is already in the Google engine third one down. https://www.google.com/#q=conspiracy...fraud&start=10

This dialogue has definitely helped me from the perspective of understanding some of the challenges I face. And thanks to whoever posted the link to that justice.gov page - there is definitely some valuable information there.

What happened to the unsubscribe thread option?