South Carolina Criminal Lawyer Blog

Paul Lindemann is being sentenced for a federal felony: conspiracy to commit application fraud. Three legal experts think Lindemann will be sentenced to a prison term of anywhere from several months to over two years. Lindemann was claiming he was earning almost $36,000 a month so he could get a loan of close to one million dollars. The loan was for a house in Tega Cay and Lindemann had plans to flip the house in exchange for a lot of money.

There is no proof that Lindemann misused any public money. In fact, the crime happened while he was working as a county councilman and his duties included overseeing a public budget of millions of dollars. Reportedly, he spoke very often about fiscal responsibility, about not spending money people don't have. In this case, Lindemann wanted to use the bank's money (someone else's money) to make a profit from the sale of the house. When he was caught, he pleaded poverty and got the tax payers to pay his legal fees because he was represented by a public defender.

Also in York county, a woman has been convicted of defrauding 14 mortgage lenders and 34 homeowners in Cumberland, Dauphin, York, and Adams Counties out of more than $6.2 million between 2006 and 2008. Joanne Seeley was found guilty after a 6-day trial on 4 counts of wire fraud and four counts of money laundering. Seeley was a real estate agent in Pennsylvania until 2006. In 2007, she became the primary owner and operator of a business called S&D Property Solutions. Testimony during the trial showed that Seeley devised and implemented a "foreclosure rescue/equity skim scheme" that fraudulently lead 14 mortgage lenders into lending over $6.2 million in loans between 2006 and 2008.

Here is how her scheme worked: Seeley would find a home scheduled for sheriff's sale and tell the homeowner he/she could avoid foreclosure by selling the home to her or one of her investor/buyers, who would then lease the property back to the homeowner after it's sold. Seeley assured the homeowner the sale would allow them to pay off their debts, help them rebuild their credit rating, and allow them to qualify for a new mortgage when they re-purchase the home in one year. Seeley also promised the homeowners that any equity they had in the house would be held in escrow by the buyer after the sale and be used as the seller's down payment. Seeley recruited several investors/buyers and lead them into participating in her program by telling them they would be reimbursed for all expenses, including their down payment plus an $8,000 "fee" for the transaction after the closing. Seeley also told the buyers they would receive monthly rent payments from homeowners that would cover most, maybe all, of their mortgage payments.

Seeley also submitted redacted sales contracts to the lenders that concealed the fact the buyer and seller had entered into buy-back agreements and the buyer's down payment was refunded to the buyer from the loan proceeds.

The trial revealed that Seeley used a large chunk of the $6.2 million in loans, approximately $2.3 million, for personal use. Seeley would charge the distressed homeowner an extremely high commission, close to 50%, equal to the homeowner's equity in the property. Later, Seeley would simply have the homeowners sign over their entire sales proceeds checks to S&D Property Solutions. Contrary to what the homeowners were promised, no funds were ever escrowed on their behalf. Instead, Seeley spent the money on her personal expenses and no homeowner was ever able to buy their home back.

If you or someone you know has been charged with mortgage fraud, you will need to speak with an experienced mortgage fraud lawyer in your area. The Mace Firm's mortgage fraud attorney in Myrtle Beach is ready to speak with you about your case. Call today to schedule your free consultation with a Myrtle Beach fraud lawyer.

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Robert Sasser of Lexington, South Carolina was sentenced in federal court for wire fraud. He was sentenced to three years in prison and was ordered to pay about $1.6 million to Wells Fargo Bank. Sasser used to be a realtor and mortgage broker in West Columbia. His charges are based on acquiring loans that were collateralized by modular homes that were extremely overvalued. Wachoiva Mortgage Corporation financed these eight loans for about $2.5 million. Loan documents had several false statements that revealed the loans were fraudulent. Among the falsifications were misstated income and asset information, forged signatures and misleading down payments. Since these loans went into foreclosure, Wachovia, now Wells Fargo, suffered a loss of about $1.6 million.

Early last year, Michael A. Wilson, 58, of Murrells Inlet, South Carolina, pled guilty in U.S. District Court to bank fraud. In November 2009, multiple indictments were returned by a federal grand jury against thirteen defendants, including Wilson, on a variety of mortgage fraud charges arising out of the collapse of Desert Sun Development (“DSD”), a commercial and residential construction company headquartered in Bend, Oregon. It all started when Wilson moved from South Carolina to Bend, Oregon where he joined DSD as a construction superintendent. In 2007, while working for DSD, Wilson fraudulently obtained two loans in his wife’s name as her attorney-in-fact for the purchase and refinance of a DSD constructed home. To close the first loan to purchase the home for $530,000, DSD principals provided a cashier’s check for approximately $112,000 at closing, falsely claiming that it was Wilson’s money.

Shortly thereafter Wilson sought to refinance the loan. To qualify for the refinance, Wilson was required to show that he had at least $47,000 in his bank account. Because he did not have sufficient funds of his own, DSD principals temporarily deposited DSD money into his account to make it falsely appear that he did. A letter was drafted at DSD to falsely explain that the origin of the $47,000 deposit was Wilson’s semi-annual bonus from DSD. Wilson signed the letter as his wife. Additionally, Wilson signed a loan application on behalf of his wife, falsely asserting that she had worked for DSD for the past two years, earning $15,000 per month. Based on these fraudulent documents, the bank approved a loan for $500,000, but required that Wilson bring $42,000 of his own money to closing. Not having the money, Wilson again used DSD money for that purpose. Relying, in part, on the fraudulent documents, banks approved and funded the loans for Wilson’s home. Wilson was unable to make the monthly mortgage payments and defaulted. The bank foreclosed and took possession of the residence. The current loss associated with Wilson’s conduct is approximately $360,000.

Bank fraud carries a maximum sentence of up to 30 years in prison and a $1,000,000 fine. If you or someone you know has been charged with fraud, call one of the mortgage fraud attorneys at The Mace Firm. The mortgage fraud attorneys in Myrtle Beach are ready to speak with you about your case. Call to schedule your free consultation.

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Surprisingly, a lot of home and condo sales in the Myrtle Beach area have been sold fraudulently. That's what Kenneth Paul Holmes, a home builder, revealed in his affidavit which was filed in federal court. Holmes is scheduled to be sentenced this week in Florence for charges related to an Horry County mortgage fraud scheme that cost banks $5.2 million. His affidavit apparently reads like a "true confessions" story. The document details "how he naively became part of a widespread mortgage fraud network of bankers, mortgage brokers and real estate agents. When Holmes balked at going through with home sales he knew were tainted, some within the network threatened his safety."

The affidavit was Holmes' "attempt to minimize any prison sentence he might receive this week after pleading guilty in February 2010 to one count of conspiracy to commit bank fraud. Holmes – who faces a maximum sentence of 30 years in prison and a $1 million fine." Holmes is asking the Judge for a sentence that does not include jail-time. Even the prosecutor for this case, Bill Day, has asked that the Judge be linient at sentencing because Holmes has provided information that led to several other arrests.

Also this week, California’s attorney general has subpoenaed mortgage giants Fannie Mae and Freddie Mac looking into their lending practices in the state. State investigators will be looking at Freddie and Fannie’s involvement in more than 12,000 foreclosed properties in California where they served as landlords, according to the Los Angeles Times, which first reported the story. They also want to find out what role the two agencies played in selling or marketing mortgage-backed securities, the newspaper reported. The attorney general has created a task force that is pursuing criminal charges and civil judgments in mortgage fraud cases. Nationwide talks have been designed to institute new guidelines for mortgage lending.

If you or someone you know has been charged with mortgage fraud, it will be in your best interests to speak with a good fraud lawyer in your area. The mortgage fraud attorneys in Myrtle Beach at The Mace Firm are ready to speak with you about your case. Call one of our experienced mortgage fraud lawyers to schedule your free consultation today.

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The US Attorney's office in Miami is accusing 27 people of mortgage fraud schemes against banks and South Florida homeowners. The charges brought against these 27 people involve mail fraud, insurance fraud and arson. The 27 Floridians conducted separate schemes, with many of the players obtaining funds illegally through the use of straw buyers and inflated home values on mortgage applications, according to authorities. At least one scheme involved a combination of arson, insurance fraud and mortgage fraud. It is unclear by the report whether any of the defendants have retained a criminal defense lawyer.

The statewide investigation is the work of the Mortgage Fraud Strike Force, a law enforcement initiative led by the U.S. Attorney's Office and state authorities. The purpose of these agencies is to crack down on people involved in mortgage fraud. The program was created in 2007, and more than 500 defendants have been charged for involvement in mortgage-related schemes.

In the first case from the investigation, U.S. v. Luis A. Oramas, 17 people were charged in a 40-count indictment for using straw buyers, placing their names on mortgage applications, and increasing home values to eventually pocket the proceeds. The mortgage fraud scheme involved defendants linked to Kasa Mortgage brokerage and New Line Realty, both in Miami. In U.S. v. Ghaith Al Nahar, six people were charged in a six-count indictment. They created $9.2 million in fraudulent loans. The indictment claims Ghaith Al Nahar, who operates Best Decisions Home Mortgage Inc. in Lake Worth, Fla, and other defendants found homes for-sale and compensated other people to act as straw buyers. After that, they submitted loan applications with false information for those homes.

After lenders approved these loans, a title agent would falsify HUD-1 statements. These statements claimed that the straw buyers would bring money to closing. Instead of distributing the money, the parties involved made unauthorized disbursements of the loan proceeds. They are facing charges of conspiracy to commit wire fraud and substantive wire fraud.

As far as the arson charge, in U.S. v. Gerardo Wilhelm, authorities claim Wilhelm, a real estate agent, partnered with a broker and an insurance adjuster to profit from a fire set at a South Florida town home. After they had the home set on fire, they made a fraudulent insurance claim for fire damage and obtained $180,000.

Mortgage fraud schemes typically employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by a lender to fund, purchase or insure a loan. Sometimes, depending on the type of scheme, mortgage fraud may be considered a form of bank robbery where the bank is unaware of the robbery until a lot later. People who commit mortgage fraud get loans based on falsely representing the value of collateral or their loan qualifications to receive a loan. They end up stealing the proceeds without intentions of repaying the borrowed amount.

If you or someone you know has been charged with mortgage fraud, call one of the federal criminal lawyers at The Mace Firm for a free consultation.

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Three loan officers and a title agent were charged in $2.5 million reverse mortgage and loan modification scheme with conspiracy to commit wire fraud. This scheme involved defrauding elderly borrowers, financial institutions and the Department of Housing and Urban Development. Reverse mortgages are a financial product that allows homeowners 62 and older to tap into their home equity to pay their living expenses. But the loan officers and title agent altered real estate appraisals to fraudulently inflate the value of the borrowers properties. According to prosecutors the borrowers didn't have enough equity to qualify for reverse mortgages.

Genworth Financial Home Equity Access, Inc., the company the borrowers refinanced with, believed the appraisals and approved loans for 14 properties in 6 states in 2009 and 2010 and paid out $2.5 million. The defendants used a loan modification scheme to hide the reverse mortgages from the original mortgage lenders and did not payoff the original loans. In some cases, the four created fictitious short sale offers to purchase some of the properties.

The defendants appeared in court on Wednesday to face the charges. This type of mortgage fraud carries with it up to 30 years in federal prison and fines of up to $1 million. They are all going to need a good federal lawyer to represent them in federal court.

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Operation Wax House is a four-year investigation into fraudulent activities in seven affluent Charlotte-area neighborhoods. Allegedly, mortgage fraud groups have been buying new houses at their true price, then arrange for a "straw buyer" - a pretender - to take a loan to buy the house for much more than the true price. In order to make this happen, many documents must be falsified to convince lenders that the homes are worth much more than they actually are. Once the sale of the home is finalized, the mortgage fraud groups split the difference between the actual price of the home and the inflated loan amount.

Federal prosecutors for Operation Wax House expect to catch up to 70 defendants for mortgage fraud, including promoters, mortgage brokers, closing attorneys, notary publics and straw buyers. North Carolina ranks number three in the country for suspicious activity reports for mortgage fraud, falling behind California and Nevada.

According to the FBI, mortgage fraud is a growing crime threat that is hurting homeowners, businesses, and the national economy. Although banks and lenders are required to keep records and report fraudulent activities, some schemes are very sophisticated and require years of investigation to uncover.

If you or someone you know is involved in a white collar crime like mortgage fraud, contact one of our Charleston federal criminal defense lawyers at The Mace Firm for a free consultation.

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Dwayne Woods is being sought by federal authorities for his involvement in several fraud schemes in the South Carolina area. Several federal defendants have used their involvement with Woods as a basis to seek a lower sentence on their perspective federal sentences. These defendants have alleged that Woods tricked them into giving away millions of dollars of investors money. There may actually be a sealed indictment waiting on Woods if he is caught. Woods best advice at this point would be to get an attorney and negotiate a deal prior to coming to federal court. Many times a defendant in this position will be held without a bond because of the governments inability to find him. Woods will need a good federal defense lawyer in South Carolina to represent him in this case.
Many federal indictments can be resolved early in the process. Fraud indictments take some time to understand and get control of the numbers involved in the case. Reviewing a federal indictment and understanding the impact of the United States Sentencing Guidelines is critical to proper representation in federal court. These guidelines make changes to a defendant's exposure to prison. The use and interpretation of these guidelines cannot be understated.

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The Federal Bureau of Investigation previously arrested over 400 defendants in "Operation Malicious Mortgage." This investigation focused on three types of mortgage fraud:
1. Lending Fraud
2. Foreclosure Rescue Schemes
3. Mortgage-Related Bankruptcy Schemes
There have been hundreds of defendants convicted under this investigation throughout the United States. South Carolina has fallen behind on these cases and is now in the position to catch up with its own investigations. The United States Attorney for South Carolina has now redirected the attorneys and prosecuting agents to focus more on white collar crime in South Carolina. Our white collar attorneys in South Carolina have handled these cases in several jurisdictions. Our Charleston Defense Attorneys have experience throughout South Carolina defending white collar cases.
This new direction will take away the focus that has been directed at street level drug dealers for the past several years in South Carolina. South Carolina is one of the few jurisdictions that has avoided complex white collar cases in the past years. It takes much more effort and resources to prosecute a white collar case than a drug case. Many times a defendant in a white collar mortgage fraud case is sophisticated and able to help prepare a great trial defense. The need to bring in experts and help the criminal defense attorney is critical to winning a mortgage fraud case.

Continue reading "South Carolina Mortgage Fraud Indictments" »

Last month U.S. Attorney William Nettles announced that his office would be pursuing more fraud cases in the Myrtle Beach area. Mr. Nettles confirmed that eight agencies are teaming up to investigate and prosecute mortgage fraud in the Grand Strand area. I have been writing about this topic for several months. Our office in Myrtle Beach is well equipped to defendant individuals accused of mortgage fraud. The first thing to understand in regard to a mortgage fraud case is that there is no federal crime call mortgage fraud. Mortgage fraud is the name given to either of the following federal crimes:
* Mail Fraud- mailing a document via the U.S. Post office with false information
* Wire Fraud- giving or receiving money via electronic transfers that are the basis of a
fraudulent scheme
* Bank Fraud- providing false information to a FDIC insured bank for a loan.

Other crimes that can easily develop are based on the actual investigation. If anyone is interviewed by a government agent and lies, there will be a separate count for that particular lie. Many times the government may not be able to prove fraud, but they can prove that they were lied to by a defendant. Speaking with the government is without an attorney is the worst thing anyone could do in a fraud investigation. Fraud is a specific intent crime and the government will try to prove that type crime through the statements of a particular defendant.
Our fraud attorneys in Myrtle Beach practice federal defense throughout the United States. We have defense attorneys in Myrtle Beach, Charleston, Miami and soon in New York City. Any federal indictment coming out of Myrtle Beach will be handled by the U.S. Attorney's office in Florence, South Carolina.

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According to the Federal Bureau of Investigation in New York, Thomas and Heidi Komasa were charged in a ten-count indictment by a federal grand jury in Burlington County for conspiracy relating to an alleged mortgage fraud scheme. The couple have been released on bond and are awaiting a trial date as they have pleaded not guilty to the charges. The indictment claims that the Komasas provided false information in order to obtain mortgage loans on five (5) separate areas of real estate. It is believed that they bought the properties in the hopes that they could sell them for a higher price once the real estate market strengthened. The Komasas were able to acquire more than $2 million in loans. However, four (4) of the properties the couple purchased went into foreclosure, indicating to the bank that the couple were not qualified for the loans they received and sparking an investigation by the FBI. As a result, they could face a maximum of thirty (30) years in prison and approximately $1 million in fines.

In these types of circumstances, an individual rarely knows that they may have committed a federal crime. Recently, the federal government has become more involved in cases relating to fraud (i.e. bank fraud, mortgage fraud, etc.) due to its economic influences. Anyone could be subject to this type of crime depending on the evidence involved, such as realtors, lenders, investors, etc. In many instances, other individuals involved in the crime may attempt to provide the Government evidence in an attempt to lessen their exposure.

These are the primary reasons that it is important to hire an experienced mortgage fraud attorney that can ensure that the evidence gathered against you is legitimate. A sentencing term is highly dependent on the amount of money involved in the mortgage conspiracy as well as the list of other charges likely to be added into the indictment. A knowledgeable federal attorney would be able to review the Federal Sentencing Guidelines and determine a likely outcome for sentencing.

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The next round of mortgage fraud indictments may soon be on the way from the United States Attorney in South Carolina. There will be developers, mortgage brokers, flippers and possible attorneys indicted. Many of the defendants are from Myrtle Beach, South Carolina. A key resource to understand this new phase of indictments coming out of the Florence office is the F.B.I. (Federal Bureau of Investigation) website on mortgage fraud. A thorough understanding of this type of indictment is critical to a good defense to this type of case. Our federal defense attorneys are experienced in defending mortgage fraud cases. Many times the key to defending this type of case is understanding the loan process and how the funds were moved from one lender to a particular borrower. Information is critical to defending this type of case. A mortgage fraud case is a house of cards. Each player standing together can be strong, but if one defendant provides information to the government investigator, a new strategy may have to be used to limit a client's exposure in federal court. One of the hardest elements for the government to prove in a mortgage fraud indictment is intent. The desire to defraud a lender is critical to the governments case and any actions taken by a defendant to pay the lender prior to an indictment could be critical to the case.

REMEMBER ! THERE IS NO FRAUD UNTIL THE BANK STOPS GETTING PAID. The lenders rarely check any information on an application until the payments stop coming. You could submitted an application that is completely false and no one will care until you do not make a payment. The lenders did not do their job prior to lending the money, but that is not against the law. Mortgage fraud is a tool that banks are using to try and shift the burden of the housing debacle that has occurred. Many individuals were told by friends, brokers, bankers and sellers what to put on applications. You will need an experienced federal defense attorney to handle this type of case.

I new U.S. Attorney has now finally taken over the office in South Carolina. After having been held up in Washington for months, this new U.S. Attorney is a breath of fresh area for many attorneys.

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The State of South Carolina has relaunched its mortgage fraud hotline after closing due to a lack of funding. The hotline received hundreds of telephone calls related to mortgage fraud in South Carolina. The United States Attorney for South Carolina is in charge of prosecuting many of these fraud cases. There are several South Carolina Attorneys that defend these types of criminal indictments. Many times the amount of prison exposure for a particular defendant will be based on the amount of intended loss related to the fraudulent scheme. Our attorneys in South Carolina represent companies and individuals that have been indicted for mortgage fraud. The investigation into mortgage fraud is usually conducted by the Federal Bureau of Investigation. The Obama administration reassigned dozens of agents to the fraud task force to handle the going rush of fraudulent transactions.

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There have been recent mortgage fraud indictments released from the United States Attorney in South Carolina. These indictments are actually bank fraud charges. There is actually no such crime in the federal judicial system called "mortgage fraud." There is a combination at times of wire fraud, mail fraud, and or bank fraud that relate to the acquisition of a mortgage or home loan. The Federal Bureau of Investigation is normally the lead investigative agency. The FBI has dedicated an entire task force for mortgage fraud cases. This comes after the dramatic increase in foreclosures in the home loan industry. The old saying is, "there is no fraud until people stop making payment." This increase in investigations is based on the powerful banking industry complaining to the government that they were defrauded by dirty investors. What they are not disclosing is the fact that the banks were in on the fraud the entire time. The banks have been banking for a long time and were well aware that the housing market was over inflated. The banks also knew that they were giving the money away to individuals that did not qualify for any loan, much less a million dollar loan. The banks continued doing this and selling the debt to other banks and investors. In other words, we will give you what ever you want and sell the debt to another bank.
A good federal defense attorney is critical to defending a case against an individual or a company. It is extremely import that a potential target of an investigation NOT SPEAK to anyone until consulting an attorney. Our defense attorneys are licensed in several states and numerous federal jurisdictions. We handle these type of federal indictments all over the country. We handle the mortgage fraud from pre-indictment all the way through an appeal to the United States Supreme court if necessary. We have an excellent appellate attorney in house for any issues that are not resolved at the trial level.

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In 2007 the Federal Bureau of Investigation had around 120 agents working on Mortgage Fraud. That number is currently over 250 agents, 18 task forces, and 47 working groups. What does that mean? It means that the Bureau has been directed to focus on the mortgage industry. There will be innocent people taken down with the rest of the individuals who will be indicted in the coming months and years. These investigations take a considerable amount of time to investigate because of the paper trail needed to prove the case. Most of the fraud cases require some type of document confirmation. Usually this entails a mortgage application with false information, falsified tax returns, or lying about assets in order to get a mortgage. The problem with most mortgage fraud cases is not all the guilty parties are charged. For instance, the mortgage broker who tells you what to write on your application, the property appraiser who takes a little extra money to up the value of the home, or the bank who could care less about the application as long as they make money.

Defending a mortgage fraud indictment is document intensive. You must have an attorney that is familiar with the application process and the necessary elements the government must prove in order to convict.

Mortgage Fraud is actually one or a combination one or more of the following:
-Bank Fraud
-Mail Fraud
-Wire Fraud
And the fraud must have impacted a federally insurance bank. This means that the bank needs to be part of FDIC (Federal Deposit Insurance Corporation). Many credit unions and other investment houses cannot complain that they are a victim of fraud because they lack the FDIC requirement. The government has continually taken the position that they will not prosecute fraud cases that are against non-FDIC companies. This policy may change as more and more mortgage fraud cases are brought to light.

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The Federal Bureau of Investigation is in charge of most mortgage fraud investigations. The agent investigates the case and the United States Attorney makes the decision on who to indict for specific acts. Many of these fraud indictments are coming to task in South Carolina. Specifically, the Florence division of the United States Attorney is in the process of indicted several individuals in the Myrtle Beach area for mortgage fraud. The Charleston office of is also in the process of investigating several suspects in the Hilton Head area of South Carolina. It is important for anyone that is a target of an investigation to hire a federal criminal defense attorney as soon as possible. The FBI agent will attempt to get as much information from individual suspects prior to any indictment. If the agent does not attempt to speak with a suspect, the agent is most likely still gathering information on the case. It is never a good idea to speak with a government agent without having gone over the specifics of the case with your criminal defense attorney.

In most Federal cases the government will agree to provide immunity to a suspect prior to speaking with them about a case. This immunity is very tricky to say the least. Many attorneys do not understand the federal system and the fact that the immunity is not true immunity. A suspect will be provided with what is referred to as a proffer letter (Kastigar Letter). This letter will provide a suspect with immunity against being prosecuted for information that is provided during the interview. However, if the government already has the information or gathers the information from another source, all bets are off and there is significant exposure to a federal indictment.

Mortgage Fraud in reality does not exist. Mortgage fraud is a combination of several federal crimes. Bank fraud, wire fraud, mail fraud, misprison of a felony are all examples of what would compromise what is called mortgage fraud. A defendant convicted of mortgage fraud will need to review the United States Sentencing Guidelines under the fraud section to determine their specific guideline range. There is not mortgage fraud section under the guidelines.

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There are several fraud investigations in the Myrtle Beach area regarding the real estate market. Many of these are mortgage fraud investigations related to large developments. The Federal Bureau of Investigation will control much of the investigation with the United States Attorney in Florence making the final decision on who will be indicted. The potential defendants range from several attorneys to individuals who simply held funds for particular company or group. Other possible targets of these investigations will be realtors, mortgage brokers, appraisers and what are referred to as straw buyers and straw sellers. Anyone indicted for fraud in federal court will be faced with some significant decisions and selecting a federal defense attorney should be at the top of the list. Federal defense requires experience with the federal sentencing guidelines and with the Justice Department.
A federal indictment carries with it significant penalties in almost every case. A mortgage indictment is based on MONEY. Who took it? Who lost it? Who lied? These are the central questions that are used in deciding who to indict. There are also individuals that will be indicted who did none of the above, but did nothing to stop a crime from occurring. This is called deliberate ignorance. In most state criminal cases there is no duty to report or stop a crime. In federal court a defendant can be convicted for participating in a crime even though they allege that they did not know a crime was even occurring. A good attorney in Myrtle Beach with significant federal experience should be consulted immediately if you feel you may be a target of any federal investigation.

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A South Carolina attorney was disciplined by the South Carolina bar for his involvement in closings related to a federal mortgage fraud case. The bar stated that the attorney was unaware that the closing were part of a mortgage fraud scheme. However, the numbers involved with the closings were suspicious according to the bar. This is a bit of a jump. If the attorney had any involvement in the mortgage fraud scheme he would have been federally indicted for mortgage fraud in South Carolina. The large increase in mortgage fraud indictments throughout the country is due in part to the large number of home foreclosures that is occurring. The banks do not care how fraudulent a loan application may be as long as they make their money. Now with them losing money they are looking for someone to sue and they are using the federal government to go after the some small buyers and sellers that just could not make the payments on their home. A good mortgage defense attorney will be able to lower the exposure in the federal system.

Most closing attorneys will be safe from indictment because their involvement is limited to ensuring that clear title passes to the buyer. In South Carolina an attorney must perform the closing of real property. In Florida, there is no requirement of an attorney to perform the closing. Title companies in Florida handle the entire process. There will be some closing attorneys that will be indicted and this fraud indictment will be based primarily on the statements of others in the indictment. Realtors, mortgage brokers, and appraisers are just some of the common codefendants to a federal mortgage fraud indictment.

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According to the "Examiner" 41 defendants have been charged with mortgage fraud. The mortgage fraud indictment alleges there were several schemes in which the defendants inflated the values of dilapidated homes. This is common throughout many federal indictments. There is a scenario in which an appraisal shows the value of a property being extremely over inflated. The loan is rendered based on this inflated value. After the sale of the property, no payments are made and the seller walks away with the profit free and clear. The buyer allows the property to go into foreclosure. Many years ago this would not have been the basis for a federal indictment, but in todays environment the banks are pointing fingers at everyone for this home foreclosure epidemic. This Chicago case is against several key players to many mortgage fraud cases. There are mortgage brokers, loan officers, real estate investors, appraisers, attorneys, and the president of a title company. With this number of individuals there will be a rush to cooperate with the government. First to cooperate may make the best deal to testify against the rest of the defendants.

The government will make every effort to recoup the money that the banks will allege they have lost because of this group. The amount of money that is alleged to have been fraudulently obtained will be critical in determining what type of prison exposure these defendants will face at a sentencing. There is a strong possibility that this investigation has been on going for over a year and the Federal Bureau of Investigation (FBI) has done an extensive review of the bank statements and closing documents related to the property transactions. The federal defense attorneys representing these defendants would be well served to communicate at some level to see if they may have the ability to defend the case in trial. Many times it will be just one defendant that can sink the rest by his/her statements to the government in a mortgage fraud case.

Investigation of a mortgage fraud case is never a quick process and the government will be sure to gather as many documents as possible prior to the indictment. Document organization and clarification will help to ensure that a defendant is not carelessly taken down with a group.

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There are going to be several mortgage fraud indictments in the coming weeks around South Carolina. The United States attorneys in South Carolina have been conducting investigations in the Myrtle Beach and Charleston areas for the past several months. These investigation will lead to several mortgage fraud indictments. Our office has spent an extensive amount of time preparing for these indictments. We have also had several clients come into our office to discuss the potential exposure from a federal mortgage fraud indictment. Many of these indictments will be based on documents submitted to and FDIC insured lending institution. Hiring an attorney with extensive knowledge regarding this type of indictment for fraud is crucial to any defense. Our team of federal defense attorneys is more than capable of representing individuals and company that are being investigating and prosecuted.

We expect the indictments to arrive with the next 3 months. If you believe you are a target of the investigation, contact our office to learn what you need to do immediately to protect your rights and your freedom.

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The Augusta Chronicle has reported that mortgage fraud cases are extremely abundant in South Carolina. The paper has reported that the Federal Bureau of Inestigation believes South Carolina is a "Hot Spot" for mortgage fraud. Although the article focuses on lawyers involved in closings and the possible ramificatoins of their participation, the central theme is the loss to the entire country for mortgage fraud. Georgia lawyers are not required to supervise every step of a realestate closing. South Carolina attorneys face a serious potential for trouble because they are required to participate in almost every level of a realestate transaction. With this in mind they must be extremely careful when reviewing documents for closings.

This article goes on to address the issue of mortgage brokers and real estate appraisers providing fraudulent documents to the closing attorney. The attorney cannot be expected to hire an independant appraiser for the property or verify each statement in the loan application. Mortgage fraud almost always involves several people. There is just no way to get the money from the lender without several people agreeing on the fraudulent documentation. Many times the key for the government will be to get one of the codefendants to spill the beans on everyone else and this will lead to many innocent people possibly being indicted. Defending mortgage fraud indictments requires a tremendous amount of time and effort for the defense attorney.

If you are indicted for mortgage fraud, be ready to fight to the end. In the current economic crisis, every dollar you have will be subject to federal seizure if possible. Your freedom and you finances must be preserved in your defense. Our defense attorneys practice in South Carolina, Georgia and Florida. We also travel nationwide on federal indictments.

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The South Carolina Law Enforcement Division (SLED) has stated in a report by the Charleston Post that cuts in funding will reduce the number of investigations for mortgage fraud, gang related crime, and violent crime. The director of SLED has stated that many investigations are going to be dropped as more and more positions at SLED are cut. SLED provides chemical analysis for most of the police departments in South Carolina.

The purposed reductions in mortgage fraud investigations will not truly affect the number of indictments that are going to occur across the county. Most mortgage fraud investigations are done by federal agencies such as the Housing and Urban Development, the Federal Bureau of Investigation, and the Secret Service could get involved depending on the funding resources used in the fraud. The FBI has dedicated over 150 agents to mortgage fraud investigations in the past year. These investigations will cover cases based on straw buyers, broker fraud, application fraud, appraisal fraud and any type of information that was used to get the loan for the property. The cut in funding for SLED will not affect mortgage fraud investigations on the federal level.

Defending a mortgage fraud indictment is not simple and should not be done by an attorney new to the federal justice system. The exposure of substantial prison time must be controlled as much as possible from the time there is any inclination that one might be facing a mortgage fraud indictment. Understanding how the United States Sentencing Guidelines will affect the case and the extreme importance of speaking to a federal defense lawyer cannot be understated.

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More indictments have come down in Miami for mortgage fraud. As I have been writting for the past several months, this is the new target area for the United States Attorney for the Southern District of Florida and many other executive agencies. This latest indictment has been filed against Peter Affatati, Anthony Affatati, Anthony Cuomo, and Brian Schiltz. The defendants made their initial appearances in Federal Court in Ft. Lauderdale and West Palm Beach. These Mortgage Fraud indictments have many of the common issues presented in any fraud case. There are allegations of "straw buyers" who bought property with no intent to keep the property, but rather to refund money back to the seller or broker. There are also allegations of creating false information on mortgage applications. This can include anual income, expenses, overstating the value of the property.

Many times the appraiser of the property is in on the mortgage fraud. The appraiser comes in and over values the property in the formal appraisal that is submitted to the lending institution. The institution relies on the appraisal when issue the loan more than any other document. Many defendants in mortgage fraud indictments fail to look at the elements of the offense. These indictments are not straight forward unless a codefendant goes to the government and says,"hey, we were trying to defraud the bank." Many fraud indictments are directly related to the lender not investigating the information provided by the borrower.

In this case there are also allegations of wire fraud, investment fraud, foreign exchange fraud and at some point mail fraud will come into play. Defending a mortgage fraud indictment is time consuming and must be taken very seriously. If you are indicted for mortgage fraud you are facing prison time and a substantial fine. Hiring a good white collar criminal defense attorney to defend your case is critical. There will not be a second chance to defend you case. Our mortgage fraud defense attorneys are happy to speak with you about your case and we handle federal indictments all over the courtry.

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The Federal Bureau of Investigation has several programs in South Carolina that they have instituted to combat white collar crime. Their white collar crime program covers a variety of related federal offenses.

The following are examples of what is covered by the White Collare Crime Program:
Insurance Fraud
Money Laundering (Usually Related to Drugs)
Financial Institution Fraud (FIF, i.e. Bank Fraud)
Telemarketing Fraud (Especially against Seniors)
Environmental Crimes (Dumping and Polution)
Public Corruption (Bribes)
Health Care Fraud (Medicare Fraud)(Medical Over Billing)
Bankruptcy Crimes (Usually Business Related)
Securities Fraud (Mortgage Fraud could be included here)

These criminal investigations in South Carolina are prosecuted by the United States Attorney in South Carolina. Walter Wilkins is the current United States Attorney in South Carolina. There is also a Federal Public Defender in South Carolina. Parks Smalls is the Federal Defender for South Carolina. The FBI has field offices in most of the cities in South Carolina. The FBI has offices in Myrtle Beach, Florence, Charleston, Columbia (Main Office), Greenville, Aiken and several other smaller cities in South Carolina.

Most of the high profile cases are listed on the FBI's website and the United States Attorney website for South Carolina. These press releases give the public a view as to what is being investigated and prosecuted by the government. All of these listed investigations have been indicted by the government. Defendants are indicted in the region in which the government feels the crime has been committed. Our office defends federal indictments all across the country. Defending a federal indictment takes experience, hard work and a willingness to communicate with a client about the government and its policies on white collar crime. A good Federal Defense Attorney in Columbia can help minimize your exposure to a federal indictment.

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Greenville online has reported that there may be an element of fraud in at least 20% of foreclosures. The South Carolina Mortgage Fraud hotline is getting a large number of calls on a daily basis. The statistics listed on foreclosure rates by Greenville online show that 1 of every 621 homes in South Carolina are being foreclosed. The loans that were granted for these properties were not properly investigated. Borrowers overstating their income and mortgage brokers assisting with the fraud will be facing a federal indictment in the coming year. The United States Attorney for South Carolina and the Federal Bureau of Investigation (FBI) are taking these cases to grand juries for indictments.
The FBI has stated taht the repackaging of mortgages will also be a target of their investigation. This includes the secondary sale of mortgages. It is even more difficult for the secondary buyer to spot the fraud.
The FBI listed South Carolina as one of the top 10 states for mortgage fraud. With such a small population in South Carolina, this could mean there is even more fraud here than in the other 9 states. Anyone under investigation for mortgage fraud needs to contact an attorney as soon as possible. Any statement or document produced for investigators could be used by the government as evidence of a mortgage fraud indicment.

Continue reading "Greenville Mortgage Fraud Practices" »

Greenville online has reported that there may be an element of fraud in at least 20% of foreclosures. The South Carolina Mortgage Fraud hotline is getting a large number of calls on a daily basis. The statistics listed on foreclosure rates by Greenville online show that 1 of every 621 homes in South Carolina are being foreclosed. The loans that were granted for these properties were not properly investigated. Borrowers overstating their income and mortgage brokers assisting with the fraud will be facing a federal indictment in the coming year. The United States Attorney for South Carolina and the Federal Bureau of Investigation (FBI) are taking these cases to grand juries for indictments.
The FBI has stated taht the repackaging of mortgages will also be a target of their investigation. This includes the secondary sale of mortgages. It is even more difficult for the secondary buyer to spot the fraud.
The FBI listed South Carolina as one of the top10 states for mortgage fraud. With such a small population in South Carolina, this could mean there is even more fraud here than in the other 9 states. Anyone under investigation for mortgage fraud needs to contact an attorney as soon as possible. Any statement or document produced for investigators could be used by the government as evidence of a mortgage fraud indicment.

Continue reading "Greenville Mortgage Fraud Practices" »

Florida has been ranked by the Federal Bureau of Investigation (FBI) has released information for this year related to mortgage fraud. Florida has been ranked the No. 1 state for mortgage fraud. The number of indictments will increase throughout Florida in 2009. There are hundreds of investigations underway. There will be mortgage fraud charges in Miami for sure. The large number of condo sales and the high price market all bring out the large numbers that the government will be looking for in a fraud indictment. Other areas of the state such as Orlando and Tampa may also have a dramatic increase in mortgage fraud indictments.
We have criminal defense attorneys in Miami who handle mortgage fraud indictments. These indictments require an aggressive defense. There is always a large sum of money the government is looking to receive from the defendant, along with some prison time. The amount of what we refer to as exposure, will depend largely on the amount of money that is taken in the fraud allegation. The straw buyer, the appraiser, the mortgage broke and the seller are all possible defendants in a mortgage fraud indictment. Our defense attorneys travel all over the United States representing clients on federal indictments. We have a team of investigators and when needed expert witnesses to assist with defending a mortgage fraud indictment.
Our Miami criminal defense attorneys are available 24 hours a day and 7 days a week.

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Greenville news is reporting that an investigation has started regarding Tower Homes in Greenville, South Carolina. The allegations are based on money being provided to buyers as incentives to get the homes. This is not going to be a classic case of mortgage fraud. From the information provided there are only allegations that money was provided to assist in the down payment. There is a tough road ahead for any agency to charge Tower Homes with any criminal activity.
I am basing this on what I have read, but there does not seem to be any illegal activity by the builder. This is a case of consumers not reading the loan documents. The economy is now suffering and people are complaining that they cannot make their motgage payments. If the terms on the mortgage are clear, there is very little room to complain that the monthly payment is increasing. Borrowers complaining that the price paid for the home was much higher than the appraisal value today will not have any ability to argue that they are the victim of fraud. The borrowers have the ability to get the property appraised prior to purchasing.
Mortgage fraud is based on actions not related to the rates on loans or the value of property decreasing. Fraud is when there is intentional deceit by the home builder, developer, appraiser, and or lender.
Tower Homes was in the business of selling homes, not representing buyers in searching for a perfect mortgage. Many people said they could not afford to buy a home from Tower Homes and walked away from the deal. Other people could not resist and agreed to do anything to get the home and now they cannot afford the payments. This is not fraud.

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The Charleston Post and Courier has reported that an Iva man has been charged with committing lewd acts in Anderson, South Carolina. The allegations are based on the defendant's alleged activities with the Boys and Girls Club in Anderson. The details of the case have not been released and no South Carolina defense attorney has been listed as representing Mikel Sylvester Boseman. Boseman will most likely be indicted in the coming days and will need to hire a criminal defense attorney.
In South Carolina, the prosecution of sexual crimes is mainly handled by the local solicitor's office. Child pornography indictments are usually handled by the United States Attorney.
The Myrtle Beach Sun News is reporting today that the trial of man charged with kidnapping and sexually assaulting a girl will postponed because of witness problems. There was a several comments posted on the Sun News related to this article. Each one was a basic conviction of the defendant without knowing any details related to the case. This is the new phenomenon in America, "Guilty until proven innocent." No matter what the evidence, as soon as the public hears someone has been arrested then they are judged guilty by the press. There is never a report that the evidence is less than credible or that there are mistakes made by police. It appears that every time a person is freed because of DNA evidence there is very little press. No follow up stories on the innocent man trying to get reintroduced to society. Any criminal defense attorney must be ready to ensure that the press is aware of the fact that each and every person accused of a crime in this country is innocent until proven guilty. Our forefathers fought for the right to not be convicted before evidence had been present. Our office of Myrtle Beach Criminal Defense attorneys is ready to represent our clients all the way from indictment through an appeal.

Continue reading "Man Arrested for Lewd Acts on Children" »

Another realtor has plead guilty to mortgage fraud. The case is out of North Carolina and is just the beginning of what many government officials are calling a nationwide investigation into real estate investments. Gregory Rankin plead guilty to a mortgage fraud scheme that is said to have been related to over $15 million in loans and 270 properties in Mecklenburg County. Charlotte is the largest city in North Carolina and as such will be the most investigated city for mortgage fraud in the Carolinas. Rankin was realtor agent for the Charlotte company Realty Solutions. There are 5 other defendants on the indictment as co-conspirators to counts of mail, bank and wire fraud. Based on the amount of money and the amount of properties involved, each defendant, including Rankin is facing prison time under the Federal Sentencing Guidelines.

Rankin is charged with being involved in 4 mortgage fraud schemes that defrauded the lenders. In this case the government has alleged a builder kickback scheme. This is when the builder gives back a portion of the purchase price to the buyer or the real estate agent or real estate broker.

Rankin has agreed to cooperate with the government. This will mean he is the so called "flip" for this case. He will now prepare to be debriefed by the government. He will give up all his co-defendants and anyone else in order to reduce his prison time exposure. The government will request the judge to reduce Rankin's prison term based upon his cooperation. If Rankin can give enough information and testify for the government, he may well get out of serving any prison time.

Continue reading "North Carolina Mortgage Fraud Conviction" »

Recently an article on mortgage fraud in South Carolina was published on the Morning News Reporter column in South Carolina Now. The article described the reasons for the decrease in mortgage fraud indictments. These reasons do not make much sense to me. I have continually defended clients for mortgage fraud and the recent addition of a mortgage fraud hotline in South Carolina should increase the incidents of these cases, not decrease. The South Carolina Department of Consumer Affairs credit the mortgage fraud hotline as a measure that has reduced the mortgage fraud rate. This hotline was just instituted in the past few months. Most of the lending and real estate transactions occurred prior to the recession and prior to this hotline.

As I have mentioned previously, mortgage fraud is going to increase dramatically this year and next year as the Justice Department has recently asked the FBI to assign over 100 agents to investigate these allegations. You can bet that there will be some innocent people indicted for mortgage fraud with the pressure being applied by the government to explain the vast number of foreclosures. There have been more than 400 real estate related indictments since March of this year. The FBI has code named the investigation "Operation Malicious Mortgage" and resulted in 60 arrests today. The FBI has stated that the target state will be Florida, Georgia, Texas, California, and Michigan. These are also the states with some of the highest foreclosure rates.

Targets of Mortgage Fraud Indictments:
Mortgage Brokers
Real Estate Agents
Lenders
Straw Buyers
Appraisers
Attorneys

The real estate boom caused many people with no experience in real estate speculation to get in over their heads and lose everything. Even if no illegal activity occurred in the real estate transaction, a complaint and improper information can get you indicted. If you are even remotely concerned about an indictment you need to speak with a criminal defense lawyer that is experienced in defending mortgage fraud indictments. Practicing in Miami for many years and defending multi-count indictments for fraud totaling almost 1 billion in loss provides the experience needed to defend your case.

Continue reading "Mortgage Fraud Indictments Drop in South Carolina" »

A Kalamazoo man (Rodney Hixon) is under investigation for mortgage fraud. He apparently purchased 38 homes in a 22 month period. Local investigators are claiming that he may have committed mortgage fraud. Lenders are claiming that they have been left with 3.5 million in debts for the loans. If that is correct, under the Federal Sentencing Guidelines, Mr. Hixon is facing 57-71 months in prison on the mortgage fraud charge in Federal Court. The question that I have is why would anyone lend this gentleman all this money in such a short period of time. There is some serious injustice with this concept. Companies lend all this money hoping to make a wind fall on the loans and then when loans are not paid they call the FBI and cry fraud. These lending companies had an obligation to check the borrowers information and confirm all documentation that was provided. The exception to this is when the lending company is the victim of an elaborate mortgage fraud scheme. A good criminal defense lawyer will investigate the information and be able to determine if the mortgage fraud scheme was perpetrated on the lender or was lack of carrying on behalf of the lender.

The Federal Bureau of Investigation (FBI) keeps records related to mortgage fraud and the following information is amount of fraud they say has increased since 2002.

2002- 5,623 Cases, with $293 million in losses.
2003- 6,936 Cases, with $225 million in losses.
2004- 17,127 Cases, with $429 million in losses.
2005- 21,994 Cases, with $1.0. billion in losses.
2006- 35,617 Cases, with $946 million in losses.

There are no statistics for 2007 as yet. The amount is surely going to be highest ever. There is also going to be a sharp increase in investigations. The FBI has assigned over 100 agents to mortgage fraud in the past several months.

The inner workings of a mortgage fraud scheme. In South Carolina, Florida and some areas of Georgia, the value of real estate doubeled, tripled and even quadrupled in some markets. Some of this rise in value was legitimate and others were mortgage fraud. The government alleges that many fraud schemes begin with a property owner obtaining a fraudulent appraisal which establishes an over inflated value for the property. The property owner then sells the property to a so called straw buyer (no legitimate). The fake buyer gets a loan from a lender for the over inflated price. The buyer gives the proceeds of the loan to the seller who in turn gives the buyer back money from the sale. At times the appraiser and a mortgage broker also get a cut back. This mortgage fraud scheme is truly against federal law and violates several other federal statutes. However, there is also a real risk that an innocent seller caught in a hot market will be indicted for completely legal conduct. The government only needs the buyer to point the finger at the seller and we now have a conspiracy to defraud a lender. As I have stated before, in our system you are guilty until proven innocent. The government will move forward on a federal indictment based on the statements of only one person. If you are accused of mortgage fraud you need to contact our office immediately. You must prepare to defend yourself and protect your assests from forfeiture proceedings. The Government may seek to forfeit any assests (especially real estate) on a mortgage fraud indictment. Appraiser fraud is not as common of an indicted crime. The apprasier is usually used as a witness against the mortgage broker and seller of the property. Mortgage broker fraud is a common indictment and is always accompanied by other counts for wire fraud, mail fraud and money laundering.

There has been a tremendous amount of mortgage fraud indictments in the past year all across the country. Just as when corporate America was being investigated for accounting practices several years ago, now the investigation is related to real estate investments and the practices that are alleged to have caused the collapse in the real estate market. Federal mortgage fraud indictments are going to become a very common event over the next two years. Mortgage brokers, realtors, lenders, and borrowers will come under the eye of the federal government. Defense lawyers must be aware of the elements and the defenses available to a mortgage fraud indictment.

Deliberate Ignorance- this is the answer to the classic defense "I did not know this was illegal". Many times in a federal indictment for mortgage fraud, a defendant will say they were unaware that any of the events that were occurring were fraudulent. That is to say, I did not see anything wrong with the transaction. Many federal jurisdictions have a jury instruction that explains away any lack of knowledge. Your defense attorney must be ready to combat this jury instruction with facts that would lead any reasonable person to believe they were not acting with any illegal motive and or had no notice that an illegal activity was occurring. The exposure under a mortgage fraud indictment will be based on the amount of money that was alleged to have loaned based on the fraud.

South Carolina defense attorneys must be aware that South Carolina indictments will be increasing over the coming years. There is a tremendous amount of complaints coming into the FBI (Federal Bureau of Investigation) about mortgage fraud in South Carolina.

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