Thursday, October 30, 2008
Former Mortgage Broker Pleads Guilty To Fraud
James Mahoney, 57, Mason, Ohio, pleaded guilty in United States District Court to one count of mail fraud affecting a financial institution in connection with his purchase of more than $2.3 million in real estate.
According to a statement of facts filed with Mahoney’s plea, he kept $730,000 from the sale of his house in Middletown, Ohio in 2001 instead of paying off his mortgage and concealed the fact with a fraudulent “Satisfaction of Mortgage” document. In 2006, Mahoney secured a loan for $1,625,000 to buy a house in Butler County, Ohio. He again created a fraudulent document when he refinanced the loan and kept the money instead of paying off his earlier loan.
For at least the last 15 years Mahoney has worked in various aspects of the residential real estate lending business, having been employed by lending institutions and operating his own business.
“Mahoney admitted using his knowledge of the real estate business and his employment position to commit fraud,” said Gregory G. Lockhart, United States Attorney for the Southern District of Ohio.
Mail fraud affecting a financial institution is punishable in by up to 30 years imprisonment and a fine of twice the amount of gain or loss, which in this case could be more than $4.6 million.
Judge Weber set a sentencing hearing for January 28, 2009.
Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Division, Gerald A. O’Farrell, Assistant Inspector in Charge, U.S. Postal Inspection Service, and John Rymer, Inspector General, Federal Deposit Insurance Corporation, announced the plea entered today before Senior U.S. District Judge Herman Weber. Lockhart commended the cooperative investigation by FBI agents, postal inspectors and investigators with the FDIC, and Assistant U.S. Attorney J. Richard Chema, who is prosecuting the case.
mortgage fraud
What a stupid closing agent that would accept from an interested party (the borrower) proof of satisfaction document in lieu of verifying directly with the lender of record that the said loans were in fact satisfied. Hopefully this stupid closing agent had adequate E&O;insurance from which the lenders were able to recoup their losses.
Posted by on 10/30 at 07:59 AM
If the satisfaction is filed at the courthouse why would the closing agent call the paid off lender?
Posted by on 01/05 at 06:13 AM
I don’t know of any courthouses that authenticate the documents that are being filed.
In this case the existing 700K mortgage somehow mysteriously satisified without being replaced by a mortgage of equal or greater amount for a borrower who was now seeking a huge cash-out refinance.
Posted by on 01/05 at 07:41 AM
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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.
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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 
