FBI: “Former Mortgage Broker Indicted for Defrauding First Coweta Bank”

July 19, 2013

The Federal Bureau of Investigation (FBI) on July 18, 2013 released the following:

“GAINESVILLE, GA— Amy B. Williams, 48, of Buford, Georgia, has been indicted by a federal grand jury on charges arising out of a scheme to defraud First Coweta Bank.

“Bank fraud is a critical problem throughout the United States, but it has hit Georgia especially hard,” said United States Attorney Sally Quillian Yates. “Georgia leads the nation in bank failures since 2008, with 78 banks failing—including First Coweta Bank, the bank this defendant is charged with defrauding.”

According to United States Attorney Yates, the indictment, and other information presented in court: Williams was the sole owner of United International Mortgage (UIM) Corporation in Buford, Georgia, and was in the business of arranging construction loans for residential builders.

In April 2007, UIM closed three construction loans for one of its customers, Mainstreet Builders Inc. The loans were intended to finance the cost of constructing three new houses in Suwanee, Georgia. The loans, which totaled more than $1.7 million, were funded by First Coweta Bank.

Williams directed an unindicted co-conspirator to forge signatures on loan documents and caused those documents to be faxed to First Coweta Bank. The bank then wire transferred the loan proceeds to an account controlled by Williams. Williams was required to hold the money in trust for the builder and to disburse the money to the builder on a draw basis, as work on the three houses progressed. Instead, she used more than $1.1 million of this money to pay off her personal debt at another bank and wire transferred $60,000 into her personal checking account. After converting First Coweta Bank’s money to her own use, Williams attempted to cover up her crime by e-mailing false documents and misleading photos to the bank.

Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “The actions of Ms. Williams, as alleged in the indictment, directly led to the failure of the First Coweta Bank and, as such, clearly demonstrates the serious nature and impact of those actions. The FBI will continue to coordinate its bank fraud investigations with its various law enforcement partners in an effort to effectively identify, investigate, and present for prosecution those individuals who do so much harm to the banking industry.”

Jason T. Moran, Special Agent in Charge, Federal Deposit Insurance Corporation-Office of Inspector General Southeast Region, said, “The Federal Deposit Insurance Corporation is committed to its partnerships with others in the law enforcement community as we address mortgage fraud and bank fraud cases throughout the country. The American people need to be assured that their government is working to ensure integrity in the financial services and housing industries and that those involved in criminal activities that undermine that integrity will be held accountable.”

Williams was arraigned today before United States Magistrate Judge J. Clay Fuller in Gainesville, Georgia.

The indictment charges one count of conspiracy and six counts of bank fraud. Each count carries a maximum sentence of 30 years in prison and a fine of up to $1,000,000. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges, and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by special agents of the FBI and the FDIC Office of Inspector General.

Assistant United States Attorney Russell Phillips is prosecuting the case.”

Federal Bank Fraud Crimes – 18 U.S.C. § 1344

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


“Madoff Has Met His Match: Mortgage Fraud Crime of the Century”

October 26, 2012

Forbes on October 26, 2012 released the following:

John Wasik, Contributor

“With less than 88 years left in this century, it’s awful tough to say what the crime of this century will be.

Will it be the $60 billion Madoff Ponzi scam? The Dot-Com bubble? My candidate is a slam dunk so far: Mortgage fraud.

Mortgage fraud took place on so many levels for so many years that it eclipses Madoff by a factor of 100. That’s my humble estimate because nobody really knows how pervasive it was. Prosecutors are still issuing indictments more than six years after the real estate market peaked.

The recent $1 billion suit against Bank of America/Countrywide alleging that the bank sold defective loans to Fannie Mae and Freddie Mac is but a small piece of this unraveling series of financial flim-flams, which rival most scams because of its pervasive nature and involvement of thousands of financial institutions and intermediaries. The bank says the government’s claims are “simply false.”

Why is mortgage fraud such a Tyrannosaurus Rex in the world of scamdom? Because it combined easy money, greed and securitizing that avarice all over the world. It was based on the myth that home prices don’t decline and quick profits could be had by nearly anyone. You, too, could become an investment banker! More importantly, it may prove to be the mother of all swindles because it nearly took down the world’s largest financial system. And we’re not out of the woods yet.

We have some idea of how many mortgage crimes were out there thanks to the suspicious activity reports supplied to the FBI by banks, starting in the first quarter of 2006. These weren’t necessarily fraud cases that resulted in prosecution. In fact, very few ended up as court cases in which people went to jail, which has been a widespread problem in mortgage fraud.

Starting in 2006, the FBI got wind of some 7,500 suspicious mortgage activities. By 2008, that figure doubled and peaked in the second quarter of last year at nearly 30,000, according to the Financial Crimes Enforcement Network or FinCen. The number of fraud filings dropped 41 percent from the second quarter of last year through this year’s second quarter.

What do these numbers mean? That bankers suspected foul play in the origination or refinancing of mortgages. And these reports were the proverbial tip of the iceberg, because they only looked at the problem from one step in the process. Here’s what else was going on, although we don’t have any hard numbers:

  • Mortgage Foreclosure “Rescues.” Companies would set up shop to promise defaulting homeowners that they could halt the foreclosure process. They’d fleece the hapless homeowner for a steep fee, then move on.
  • Appraisal Scams. Individuals would hire crooked appraisers to under-appraise a home, obtain a mortgage, then sell it at a much-higher price.
  • Securitization Swindles. This may be the biggest scam of all. Junk mortgages were bundled, given the highest credit ratings, then sold to investors in vehicles like collateralized mortgage obligations. These “sub-prime loans” are still on the books of some of our largest banks, Fannie Mae and Freddie Mac.
  • Robo-Signing. Banks eager to sell loans to Wall Street hurried the process along by creating automated, illegitimate pipelines. State attorneys general settled with the banks on this issue, although no one seems to have been prosecuted for these crimes and it’s done little to stem the foreclosure wave.
  • Predatory Lending. Low-income areas were targeted by rapacious brokers and bankers to sell mortgages and home-equity loans with high rates and fees to people who couldn’t afford them.

How much did all of this cost Americans? Again, there’s no reliable estimate, but when this massive house of cards came tumbling down at the end of 2008, trillions were lost. Wall Street and AIG insurance got a $700-billion-plus bailout and American homeowners are still down some $7 trillion in terms of lost equity, according to Robert Reich, an economist and former labor secretary.

While a handful of hedge fund gurus and contrarian investors won big on betting against this mammoth mortgage swindle, “Wall Street’s excesses almost ruined the economy,” Reich said. If the Federal Reserve, U.S. Treasury, Congress, George W. Bush and President Obama hadn’t teamed up to bail out the banks, this year would’ve been worse than 1932, instead of a sluggish 2012.

And the beat goes on as prosecutors dig through layers of the mortgage fraud. Here’s just a typical sampling of some recent activity from the FBI and federal prosecutors:

“A federal indictment charged 17 defendants in Charlotte, North Carolina, and elsewhere with racketeering, investment fraud, mortgage fraud, bank bribery, and money laundering. The government alleges a criminal enterprise engaged in an extensive pattern of racketeering activities, consisting of investment fraud, mortgage fraud, bank fraud, money laundering, and distribution of illegal drugs. Members of the enterprise also bribed bank officials and committed perjury before the grand jury. The co-conspirators stole more than $27 million from more than 50 investor victims. Rather than investing victims’ money as promised, the enterprise diverted victims’ money to finance its mortgage fraud operations and to support its members’ lifestyles.”

I wouldn’t be exaggerating if I predicted that there are hundreds more mortgage frauds yet to be discovered and prosecuted. The states are finding them all the time, some four years after the collapse of Lehman Brothers.

The larger problem is that the perpetrators are still at large and the system that allowed huge derivative gambles on mortgages is still in place. The mega-banks behind this devilish casino got larger, and still need to be broken up. Fannie Mae and Freddie Mac, the two quasi-public mortgage insurers that bought warehouses of bad mortgages, are still wards of the state. And foreclosures continue to ravage communities from California to Florida.

After what will certainly be one of the closest and contentious elections in decades, Congress needs to get to work to bust up hobbled giants like Bank and America and Citigroup. Then it needs to institute the Volcker rule to isolate speculation from federally insured banking activities or bring back Glass-Steagall, which completely separated trading from regulated lending as part of New Deal reforms.

A tax on speculative trading would also reduce systemic risk. I don’t care if banks gamble on their trading desks, but they shouldn’t do it expecting a big bailout on the taxpayers’ backs.

What can you do? You can report suspicious activity to your state attorney general or the Department of Justice, through its financial crimes site stopfraud.gov. You may not help the government land a big crook — they all seem to be enjoying their fat compensation packages in the Hamptons — but you could give prosecutors a leg up on shutting down an ongoing scam.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Prosecutors Say Mortgage Fraud Epidemic Highest In Northern California

October 10, 2012

CBS Sacramento on October 9, 2012 released the following:

“Reporting Nick Janes

SACRAMENTO (CBS13) – Federal investigators say scammers have been targeting families on the brink of losing their homes.

As prosecutors put it, we’re talking about a tidal wave of crime against vulnerable homeowners. In our area alone, the cases involve thousands of alleged victims and losses exceeding $9 million.

“The sheer impact of foreclosures and the fraud it’s generated in our communities is simply devastating,” FBI Special Agent Herb Brown said.

Prosecutors say foreclosure fraud could be more prevalent in Northern California than anywhere else.

“More defendants were charged with federal mortgage fraud crimes in this district than any other district in the country,” said Benjamin Wagner, the U.S. Attorney for the Eastern District.

That’s saying something when you see the staggering numbers released Tuesday from the year-long “distressed homeowner initiative.” Multiple federal agencies combined efforts.

Nationwide, 530 defendants are charged for alleged schemes involving 73,000 victims defrauded out of more than $1 billion.

“Behind the numbers there are true stories and true victims. They can be your neighbors, they can be your family members, they can be your co-workers,” Brown said.

Locally, one scheme promised to reduce home loans by 75 percent. A Roseville duo is accused of targeting Spanish speakers with TV and radio ads. A statewide scam promised to find investors to buy mortgages at discounts.

The common theme: all demanded money up front but never delivered. Prosecutors promise their crackdown is far from over.

“More investigations are under way and we expect that more prosecutions will arise as a result of the initiative that was started in the past year,” Wagner said.

Unfortunately, as is the case in most fraud cases, even after conviction prosecutors say the chance of victims getting their money back is very small.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.