South Carolina Criminal Lawyer Blog

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.

Continue reading "Mortgage Fraud Indictments" »

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.

Continue reading "FBI Mortgage Fraud Task Force" »

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.

Continue reading "Mortgage Fraud Defense Attorney" »

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.

Continue reading "Myrtle Beach Mortgage Fraud" »

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.

Continue reading "Attorney Discipline for Real Estate Closings" »

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.

Continue reading "Chicago Mortgage Fraud Indictments" »

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.

Continue reading "Mortgage Fraud Indictments Coming Soon" »

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.

Continue reading "FBI declares South Carolina a Mortgage Fraud "HOT SPOT"" »

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.

Continue reading "Mortgage Fraud Investigations Could Slow" »

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.

Continue reading "More Miami Mortgage Fraud" »

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.

Continue reading "FBI and White Collar Crime in South Carolina" »

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.

Continue reading "Florida Mortgage Fraud Indictments" »

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.

Continue reading "Greenville Mortgage Fraud " »

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.

Continue reading "Mortgage Fraud" »