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Last week, Indian River County Sheriff Deryl Loar implemented a drug task force on the highways. Many patrol cars were assigned to their stretch of highway, pulling over vehicles that sped or had other minor traffic violations in hope of discovering illegal drugs or other criminal activity. Of the cars pulled, surprisingly many had drugs on them or were wanted on warrants. One car was a rental car, driven by a suspended license driver, headed to Georgia, with marijuana in the car. Others involved one driver having numerous pain-killer scripts from travelling all across South Florida for doctors and their signatures to write off drugs like Oxycontin, Percocet, and Vicotin. The law enforcement agency in this article had felt like they took a chunk of crime off the streets and done well in one days simple work.

Prescription pills used illegally or in possession by those without prescription is a felony in most if not all cases and are dealt aggressively by state prosecutors. Trafficking amounts can be as low as one pill in certain cases.

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The next installment of Attorney Behr’s mortgage fraud prosecutions series:

18 U.S.C. §1956 Laundering of monetary instruments

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18 U.S.C. §1957 Engaging in monetary transactions in property

derived from specified unlawful activity
Both statutes essentially have the same purpose of preventing persons from legitimizing proceeds obtained illegally although there are differences. 18 U.S.C. § 1956, is concerned with any financial transaction concerning proceeds of a “specified unlawful activity”73 whenever action is focused to keep the criminal activity from being discovered, or to hide the source or current possessor of the funds, or to avoid the mandatory disclosures under the Bank Secrecy Act under Title 31 U.S.C.74 Conversely, provisions of 18 U.S.C. § 1957 is applicable if a person “…knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity…”75
In United States v. Moncrief, 133 Fed.Appx. 924 (5th Cir. 2004), both of these statutes were instituted in a case which the government claimed to be “…the largest mortgage-loan-fraud operation ever to be prosecuted.”76 The case involved Meis Enterprises which was owned and operated by the Meis family.77 Mei Enterprises was a conglomeration of several businesses operated by members of the Mei family.78 Mei Enterprises operated a construction company and several real estate companies.79 Although the assortment of companies had differing bank accounts and officers in charge, Mei Enterprises “…operated out of one common office.”80
The alleged end result of the mortgage fraud scheme was to collect “…large amounts of cash by inducing mortgage lenders to provide the Meis with loans that were $50,000 to $80,000…” over what “…it cost the Meis to purchase the real estate that served as the collateral for the loan.”81 In order to obtain the loans, “…the Meis orchestrated sham real estate transactions in which the Meis would appear to sell a particular property, which…” would overlap “…with actual sales in which the Meis would purchase, for the first time, the very same property.”82 Purportedly, the Meis first would find a property for sale and “…acting through one of their realty companies such as Hathaway Properties, would contract to purchase the property from its owner.”83
Third parties or straw buyer would serve as a temporary purchaser usually Frank Mei Sr. to complete “…a parallel sham transaction that would be used to obtain an inflated loan.”84 Mortgage brokers in one of the Mei Enterprises would falsify employment and income information on loan application to lenders.85 Eventually, Moncrief, a residential real estate appraiser became involved in the Mei scheme.86 Allegedly, Moncrief used the Mei’s formula for over inflating the value of selected properties and “…was involved in more straw buyer transactions than any other appraiser that the Meis use…”87 which exposed him to the money laundering violations.88
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Any use of the previous article requires written permission from Ralph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.

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South Florida Criminal Defense Lawyer Blog is proud to present the next installment of Attorney Behr’s mortgage fraud prosecutions series:

18 U.S.C. §1344 Bank Fraud
Persons who knowingly executes or makes an attempt to execute a scheme or ploy to “…defraud a financial institution; or to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution by means of false or fraudulent pretenses, representations, or promises…” may be convicted under this statute.65
In United States v. Walsh, 75 F.3d 1 (1st Cir. 1996), the defendant was under indictment for a scheme allegedly carried out “…by directing his employees to obtain 29 specific loans through the use of deceptions so that customers could purchase condominiums from Walsh and his associates.”66 The defendant along with other investors “…purchased apartment buildings or complexes, converted the property into condominiums, and sold the condominiums to customers, using the unit sales to pay off the acquisition financing.67 The defendant also usually served as a trustee representative and legal counsel for a trust set up to acquire the buildings.68 “During 1986, sales of units in one of the projects started to fall behind schedule and the trust began to have difficulty repaying its acquisition loan.”69 The defendant subsequently discovered a bank “…made mortgage loans available rapidly-with no verification of income, assets or down payments-but the loans required a twenty percent down payment and secondary financing was prohibited.”70
Along with the first failing projects, others followed suit and the defendant instructed his employees to arrange loans “…for unit purchasers and to falsify documents submitted to…” the bank “…to conceal the existence of secondary financing (and in some cases third mortgages as well).”71 Loans were eventually defaulted on and the bank “…incurred substantial losses.”72
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Any use of the previous article requires written permission from Ralph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.

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Victor Thomas Clavizzao, 46, has been sentenced to 5 years in prison on convictions of conspiring to commit mortgage fraud. The court also ordered Clavizzao to pay $2 million in restitution and to forfeit an additional $6 million. Clavizzao had entered a guilty plea on September 23, 2009. Court documents stated that Clavizzao worked as a mortgage broker in the purchase of 13 real estate properties. He conspired to submit false and fraudulent information to a variety of lenders in the hopes of inducing the lenders to fund bad loans.Clavizzao’s co-defendant, a Pinellas property flipper who procured bogus loans with Clavizzao’s assistance, was sentenced earlier by a US District judge to 13 months in prison in his actions related to the conspiracy.

Mortgage fraud is a popular charge being seen in the news these days. If you are involved in such an incident, do not forgo your rights to the state. Defend your rights in court with a lawyer that knows the law and that will fight for you.

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Huey Granderson of Millersport, Ohio was charged with three counts related to an insurance fraud ring which involved real estate. Granderson was the ringleader of this group that committed theft in upwards of $5 million from companies in the area. He pled guilty to partaking in corrupt activities, theft and failure to file an income tax return; all have been deemed felonies. According to his plea agreement, the other 14 dropped were lifted from his case. Granderson is set for sentencing at a later date although he can face up to 19 years in prison and a hefty fine.

White collar crime can be committed by a number of individuals, generally those with images like accountants, lawyers, doctors, business executives, stock brokers, and bankers. Real estate fraud comes under the grouping of white collar crimes. Penalties for a white collar crime conviction, as displayed in Granderson’s instance, can include criminal forfeiture, payment of fines, supervised release, restitution, and imprisonment.

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Here is the next installment of Attorney Behr’s mortgage fraud prosecutions series:

18 U.S.C. §225 Continuing financial crimes enterprise
Continuing financial crimes enterprise statue criminalizes any person that “…organizes, manages or supervise a continuing financial crimes enterprise; and receives $5,000,000.00 or more in gross receipts from such enterprise during any 24-month period…”48 The meaning of “…a continuing financial crimes enterprise…” is any combination of eleven other criminal violations found within the same United States Code title “…affecting a financial institution, committed by at least 4 persons acting in concert.”49
This statute was made use of in United States v. Lefkowitz, 125 F.3d 608 (8th Cir. 1997). “From 1984 to 1994, Lefkowitz was President of Cit-Equity Group, Inc. (CEG), a California corporation that formed real estate limited partnerships to build low and moderate-income housing.”50 Starting in 1987, “…CEG began concentrating on projects that would qualify limited partners for low-income housing tax credits…” from the federal government.51 Obtainment of these credits were had when investors built, rehabilitated or acquired “…buildings in which a prescribed percentage of the apartment units are occupied by low-income tenants.”52 Subsequently, the “…government allocates tax credits to the States, with at least ten percent reserved for ventures in which nonprofit organizations participate.”53 Following the federal allocation, individual states and local housing agencies would dispense “…the credits to specific projects.”54
Funds raised from limited partners were used for differing projects as equity, “…generally between one-quarter and one-third of the total project cost.”55 Specifically, after a building is completed, “…CEG’s management company lease out the apartment, the state housing agency release the allocated tax credits, remaining debts to the builder were paid, and…” lastly “…limited partners began receiving their annual tax credits.”56
“During the late 1980’s, CEG’s builders obtained construction loans to build the projects, while CEG obtained permanent financing to replace the construction loan once a building was completed.”57 Starting in 1990 construction loans became hard to obtain and CEG began marketing First Secured Mortgages (FSMs) to other investors.58 These FSM investors made loans to limited partnerships that owned by one or more of the projects “…with the expectation that CEG’s permanent lenders would take out the FSM loans with long-term mortgages.59
“When Lefkowitz left CEG in May of 1994, properties in which limited partners and FSM investors had invested more than $80,000,000 were unbuilt, unfinished, or lost in foreclosure.”60 “Funds from limited partners and FSM investors were first deposited in an operating account for each particular investment.”61 However, “…Lefkowitz and CEG as general partners immediately transferred all investor funds to a central CEG account.”62 Once in this account these monies were misused by the company.63 The extent of the alleged scheme and the participation of the defendant’s general partners provided the evidence needed to convict the defendant of the crime of continuing financial crime enterprise statute, because “…banks invested a total of $1,120,000 in…” FSM loans.64
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Any use of the previous article requires written permission from Ralph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.

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Inyang Amos was charged via a superseding indictment with 10 counts of mortgage fraud through interstate wire, one count of engaging in a monetary transaction involving criminally derived property and two counts of aggravated identity theft. He allegedly devised and executed the fraudulent scheme from 2003 through 2006 in which 15 residences were purchased and resulted in a loss totaling $400,000 to various mortgage lenders he worked with. Inyang would recruit others in order to have money lent to them by mortgage lenders and appearing to them as a person in the “real estate business.” Single family homes were the primary target and promising financial terms lured in his victims. If found guilty of these charge, he faces a max of 20 years in prison on each count of mortgage fraud, 10 years for the transaction count and minimum of 2 years for each aggravated identity theft count. A Federal district court judge will be responsible for the sentencing.

A white collar offense can also lead to civil lawsuits filed by the government or the persons who were allegedly victimized by the crime. Unlike in a criminal case, the accused in a civil lawsuit does not have the right to remain silent, and they may be obligated to testify at their own trial. An attorney will not be appointed for them if they cannot afford one on their own.

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Incidents of major crime ticked up in 2008 over the previous year but were significantly down from 10 years ago, according to the Florida Department of Law Enforcement, which today released the annual statewide crime report. “The number one priority of government is to make our neighborhoods safe and secure for Floridians,” Gov. Charlie Crist said in prepared statement included in the announcement. “Our state is committed to implementing the necessary tools and resources to deter criminal activity and protect the people.”

The report also said that domestic violence offenses dropped by 1.8 percent compared with the previous year. Nonviolent crime, which includes burglary, larceny and motor vehicle theft, increased 1.7 percent, the report said.

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Further exposition of Attorney Behr’s mortgage fraud prosecutions series:

18 U.S.C. § 1341 Frauds and swindles
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18 U.S.C. § 1343 Fraud by wire, radio, or television
Also know as the mail and wire fraud statutes. These statutes explain any person “…having devised or intending to devise any scheme or…” ploy while making material misrepresentations in conjunction with the use of the United States Postal Service or the use of any electronic media format may be exposed to prosecution under these statutes.36
An example of both these statutes in action is outlined in the Seventh Federal Circuit case of United States v. Owens, 301 F.3d 521 (7th Cir. 2002). “A jury convicted real estate appraiser Reginald Owens of mail fraud and wire fraud for his part in a multi-million dollar real estate and mortgage fraud scheme.”37 The alleged “…scheme was a land “flip” scheme, which basically involved having people purchase distressed properties for cash and then immediately resell that same property at artificially-inflated prices.”38 One of the co-defendants, Brian Parr’s “…role in the scheme was to first identify the property he wanted to buy through realtors and by searching the Multiple Listing Services (“MLS”), a real estate computer database that showed properties for sale and the seller’s listing price.”39 While arranging for the proper contracts for purchase of these properties, “…Parr would prepare to sell the property at an artificially-inflated price to a second buyer.”40 These sales mostly happened at the same time; however there were instances when the subsequent sale was performed prior to the property being contracted with the first purchaser.41
Second possible buyers were lured in with offers of “…no money down and cash back at closing.”42 “The second buyers, however, typically did not have jobs or bank accounts and thus could not have normally qualified for a mortgage.”43 In avoidance of this potential problem, “…several other co-schemers, including loan officer Tamira Smyth, created false documents to submit to the lender institutions.”44
Besides false documents, the mortgage brokers additionally worked with individual appraisers to make certain the appraisals synched up with the contract price of the subsequent sale to exploit Parr’s profits.45 The appraisers utilized inflated the value of the properties by leaving out critical pieces of information from their appraisal reports and the MLS and “…by comparing the sale house involved in the flip transaction to houses that were far superior.”46 “Parr then used the profits from each transaction to pay his co-schemers.”47
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Any use of the previous article requires written permission from Ralph Behr and from this website and its subsidiaries under State and Federal Law. DO NOT copy and use the text provided above and/or publish as your own. The document may only be used for private study or distributing among peers in paper, not on internet transmission, with no intent to make profit or sell without credit being due to the original author.

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According to AP reports, a lawyer-turned-tax preparer was jailed after a jury convicted him of helping a radiologist and others hide $24 million in income. A defense lawyer for 59-year-old Bernard J. Bagdis of Norristown says his client was obsessed with the tax code and did not believe he had to file or pay taxes, in part because of business losses. The jury found otherwise, convicting Bagdis, 57-year-old radiologist Bertram Russell of Gladwyne and 63-year-old engineer Richard Frase of Schoharie, N.Y., of dozens of counts. Nine defendants pleased guilty before trial. Prosecutors say Russell filed no taxes despite earning nearly $3 million in income from 1998 to 2006.

They say the 12 defendants together avoided nearly $5 million in taxes.

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