Thursday, October 16, 2008
Detroit Announces Formation Of A Mortgage Fraud Task Force
Acting United States Attorney Terrence Berg announced the formation of a multiagency task force set up to take aim on the escalating problem of mortgage fraud in the Eastern District of Michigan.
As mortgage fraud continues to have significant consequences that affect the housing market, law enforcement has stepped up its commitment to fighting this insidious crime. To increase the resources being dedicated to investigate and prosecute mortgage fraud, Berg announced that 16 federal, state, and local agencies and three financial institutions have joined forces to coordinate their efforts, share information, and target the most significant violators committing fraud in connection with mortgage lending and the housing market, all of which have a significant impact on Michigan’s economy.
Acting United States Attorney Berg said, “With Metro Detroit being at the top of nearly every list in terms of mortgage fraud and home foreclosures, we need a full-court press that brings all the federal, state, and local law enforcement agencies, the regulators and the major banks together to go after the big mortgage fraud players. I want to commend the leadership of the FBI in Detroit for taking the initiative on this project, and also recognize the participation of our private sector partners. I am very encouraged by the commitment of the Task Force members.”
The agencies participating in the Mortgage Fraud Task Force, which held their first meeting October 2, 2008 in the U.S. Attorney’s Office, include Federal Bureau of Investigation, Wayne County Register of Deeds – Deed Fraud Unit, Wayne County Sheriff’s Department, Wayne County Prosecuting Attorney, Washtenaw County Clerk/Register of Deeds, Oakland County Register of Deeds, State of Michigan Office of Financial Regulation, State of Michigan Attorney General’s Office, U.S. Department of Housing and Urban Development – Office Inspector General, United States Postal Inspection Service, Internal Revenue Service, Federal Deposit Insurance Corporation – Office of Inspector General, U.S. Department of Agriculture- Office of Inspector General, Small Business Administration- Office of Inspector General, the U.S. Trustee Program, Flagstar Bank, JP Morgan Chase Bank, and Bank of America.
The Task Force will concentrate their efforts in the distinct area known as “fraud for profit” or “industry-insider”. This fraud involves the skimming of equity, falsely inflating the value of the property through false appraisals and the issuance of loans on fictitious properties. Based on existing investigations and mortgage fraud reporting, roughly 90 percent of all reported losses involve collaboration or collusion by industry insiders.
The Task Force and its partners recommend that potential and existing homeowners follow the below-listed tips to protect against mortgage fraud:
1. Get referrals from real estate and mortgage professionals. Check licenses of the industry professionals with state, county, or city regulatory agencies.
2. An outrageous promise of extraordinary profit in a short period of time should signal a problem. If it sounds too good to be true, it probably is.
3. Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques.
4. Get written information that includes recent comparable sales in the area, and other documents such as tax assessments to verify the value of the property.
5. Understand what you are signing. Check your information against the information in the loan documents to ensure they are accurate and complete. If you do not understand something, asks questions, or seek the assistance from an attorney.
6. Make sure the name on your application matches the name on your identification.
7. Review the title history to determine if the property has been sold multiple times within a short period. It could mean that this property has been “flipped” and the value falsely inflated.
8. Never sign any loan documentation that contains blanks. This leaves you vulnerable to fraud.
Additional information can be found on the FBI’s website at http://www.fbi.gov, search Malicious Mortgage Fraud.
To report illegal activity related to mortgages in Detroit or anywhere in Michigan; please call the Detroit Metro Mortgage Fraud Hotline at 313-237-4530, on the internet at http://www.tips.fbi.gov, or the Wayne County Register of Deeds’ Deed Fraud Hotline at 313-2245869.
mortgage fraud
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
More Trial Coverage
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
