EXCLUSIVE – Appraiser Indicted for Using Non-Licensees to Expand Capacity

Rachel Dollar —  March 10, 2017 — 7 Comments

Matt Garner, appraiser, Lexington, Kentucky, was indicted and charged with conspiracy to commit wire fraud and false statement in a matter within the jurisdiction of an agency of the United States based on allegations that he used unlicensed surrogates to conduct residential real property appraisals under his name and license.

According to the indictment, in 2015, Garner began an illegal and deceptive practice of using uncertified and unlicensed surrogates, including two individuals identified in the indictment as GD and ZG, to perform appraisals and fill out Uniform Residential Appraisal Reports without attributing the reports to those individuals or identifying their involvement.  In most instances, Garner never visited the property.  He paid the surrogates a portion of his appraisal fee.

The indictment further alleges that Garner instructed his surrogates to pretend to be him if questioned by anyone during the appraisal process and he provided them with his own business cards to provide to others, if necessary.

By doing this, Garner was able to greatly increase the number of appraisals he could perform in a given time.

According to the indictment, Garner made the following material statements by signing and submitting the appraisal reports performed by surrogates:

  1.  That he had personally performed the appraisal;
  2. That he had not been assisted by any other person in performing the appraisal;
  3. That he was knowledgeable of and experienced in the market where the property was located.

*CORRECTION:  This article originally stated that Garner was charged with bank fraud.  He was actually charged with violation of 18 USC 371 – conspiracy and the underlying substantive offenses are identified as wire fraud in violation of 18 USC 1343 and false statements in a matter within the jurisdiction of an agency of the United States in violation of 18 USC 1001.

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Rachel Dollar

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7 responses to EXCLUSIVE – Appraiser Indicted for Using Non-Licensees to Expand Capacity

  1. We should all be cognizant of rules and regulations when doing our appraisals, which most appraisers are. It is tempting to get more work and get more reports completed in order to make more money but it all goes away if one goes to prison. Compared to other industries, appraisers have it good with freedom, good income and for most of us, no immediate supervision (no manager watching over your shoulders) and no one managing our time but ourselves. If we just focus on all the good things we have and stop focusing on what we don’t have, we would realize we are in a very fortunate position to be appraisers. Its a great profession. Whenever I think my life is not good enough or I need something more, I remember all the people who escaped from Syria or other war-torn countries with little more than just their lives or the people living in filth and extreme poverty in some areas of Mexico or South America and realize how lucky I am to have a home, good job, and my health. The cup is half full, not half empty.

  2. This is no less egregious than “national” commercial appraisal firms who send inexperienced folks on planes across the country to “appraise” a variety of property types. I’ve seen appraisals of hotels in my state that did not use a single comparable sale in the state. There were five sales of limited service hotels in the same city over the preceding trailing twelve months of the appraisal date in one particular case. The coming real estate correction or depression will be triggered by rising interest rates but exacerbated by over-valued portfolios. Willful acceptance of incompetence is the cancer that will kill our society.

  3. Anthony D. Zinnanti March 16, 2017 at 5:28 pm

    Hi All,

    I have an idea. How about we start indicting AMCs for (1) federal extortion, (2) RICO violations, (3) and conspiracy to violate civil rights? And, because 12 U.S.C. 3345 is per se unconstitutional, I would also like to see the state regulatory agencies slapped with Section 1983 suits. This is the catch: “shall meet or exceed the minimum qualification requirements of the Appraiser Qualifications Board of The Appraisal Foundation.” The TAF is a private entity and has no business making rules which are enforced as de facto “law.”

    I am saddened, but not surprised, to see the collective descent upon a fellow appraiser who was doing what a lot of appraiser are forced to do as a result of the imposition of an ad hoc scheme which had little thought as to the impact on the valuation community. I have talked to appraisers (under attorney-client privilege) who acknowledge, “we have no choice but to lie.” I also spoke with Jim Parks in the presence of his general counsel and he stated that, but for me, no one had given the statutory scheme this thought. Really? After the 2008 meltdown?

    I am an attorney of 18 years with a plethora of experience in the federal and state criminal courts in California. I also hold A BREA trainee license. Where the regulatory agencies were quick to sell their soul to the lending community (again and again), it not only reduced appraisers’ revenue, but put into place onerous restrictions barring any form of meaningful assistance. The state regulatory agencies don’t care about the quality of appraisers. If they did, they would regulate non-lender, as well as lender, valuation – which they don’t.

    You do not know exactly what was said to whom and who was being used for what. And, if you buy the fact that USPAP is actually constitutionally valid (which it is not), then you also know that a mere inspection of the property does not constitute “substantial assistance” warranting disclosure. Accordingly, you’re damned if you do and you’re damned if you don’t. Try to get a straight answer on that one from the regulatory agencies. (Every time I call, the refrain to the tough question is the same: “Don’t do anything misleading.” That’s it.)

    I will never – ever – do lender work. I find that appraisers are more than happy to dance to the lenders’ tune out of the shear fear of being blacklisted. This is a reality and it’s a violation of the law. But, no one stands up to it. They just leave the profession or put up with it.

    The bottom line is that you cannot delegate rule making authority to a private entity, to wit, the TAF. The TAF is a private entity. They make the rules (technically, “standards”) which are enforced by the state regulatory agencies. Jim Parks and the ASC has zero to do with that – but we keep hearing references to “the feds.” What “fed”? John Brenan and his crown?

    Two things run lending: fear and greed. I love the little addendum to the appraisal order that says “Do not include the invoice with the appraisal report.” This way the consumer won’t know that the lender and the AMC are taking 60% to 70% of the appraiser’s fee and ripping off the consumer and the appraiser.

    It’s repugnant.

    I appraise for personal reasons. I can sit on my rear end and make in an hour what it takes the average AMC delegated appraiser 6 to 8 hours to make. It is a rife injustice what appraisers are paid.

    So, don’t be so quick to judge. Stand up to this and question what’s going on. I have no doubt that the AMC is as culpable as any one else.

    In fact, I have some time tomorrow and I know a few AUSAs. Maybe it’s time for a chat about some of the AMC behavior – extortion, collusion and plain old theft.

    I’ve had enough.

    Very truly yours,

    Anthony D. Zinnanti, Esq. SBN 196778
    LAW OFFICE OF ANTHONY D. ZINNANTI
    28005 Smyth Drive, #194
    Valencia, California 91355
    Tel.: (661) 287-6100

  4. If any of these appraisals were for “Federally Related Transactions” its a violation of Federal Law and the appraiser should be referred to the FBI and US Attorney for prosecution.

    • He is being prosecuted by the Kentucky US Attorney. This is not a licensing issue – this is a criminal case where he is facing criminal charges for conspiracy to commit wire fraud and false statements.

  5. Absolutely, throw the book at him. While doing a review here in Illinois I found an Appraiser that was using non-licensed people to do the appraisal and he signed off as Supervisor. He no longer has a license. If nothing else, we need to police our own so the public retains their confidence in the system. Go get em Rachel !

  6. If these allegations turn out to be true, this person should be stripped of his appraisal license and not be permitted to be licensed in any capacity in the real estate business in the future. There are many good hard working appraisers out there that do an excellent job day in and day out. Appraisers like this one give the entire profession a bad reputation.

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