Monday, October 12, 2009
Paralegal Indicted For Alleged Role in Mortgage Fraud Scheme
Heather Bliss, 34, Norwalk, Connecticut, has been indicted and charged with one count of conspiracy to commit bank fraud and three counts of bank fraud. The charges stem from an alleged mortgage fraud scheme.
The indictment alleges that Bliss was employed as a paralegal for a real estate lawyer in Wilton, Connecticut and, in that capacity, had responsibility for preparing and maintaining all legal and bank documents related to real estate transactions handled by her employer. The indictment further alleges that, from approximately April 2006 to April 2007, Bliss, the lawyer for whom she was employed, a property developer and others conspired to defraud JP Morgan Chase Bank, IndyMac Bank, and Washington Mutual Bank, in a mortgage fraud scheme.
The Indictment alleges that Bliss and her co-conspirators submitted false mortgage loan applications to financial institutions to obtain mortgages on various properties in Fairfield County, Connecticut in order to develop and sell the properties for profit, and to pay off debts owed to "hard money" lenders from whom they had previously obtained high interest loans. The mortgage applications, which included false income information and omitted the mortgage applicants' true indebtedness, caused the financial institutions to issue mortgage loans on properties that Bliss and her co-conspirators would not have otherwise been qualified to purchase, allowing the applicants to qualify for mortgages that far exceeded their ability to repay the loans.
The indictment alleges that Bliss overstated her income on the mortgages for which she had personally applied, and that she applied for new mortgages within 60 days of receiving prior mortgages knowing that the earlier mortgage would not be revealed when Bliss' credit report was run by the financial institution to which she applied.
Through this scheme, it is alleged that Bliss and her co-conspirators defrauded the three financial institutions of a total of more than $3.5 million.
If convicted, Bliss faces a maximum term of imprisonment of 30 years, on each count, and a fine of up to approximately $7 million.
The indictment was returned on October 7, 2009. Blissappeared before United States Magistrate Judge Holly B. Fitzsimmons and entered a plea of not guilty to each of the charges. Following her arraignment, Bliss was released on a bond in the amount of $250,000.
Nora R. Dannehy, United States Attorney for the District of Connecticut, announced the indictment.
U.S. Attorney Dannehy stressed that an indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial at which it is the Government's burden to prove guilt beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Rahul Kale.
In July 2009, the U.S. Attorney's Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including "foreclosure rescue" schemes, and "short sale" schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an email to .
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney's Office; Federal Bureau of Investigation; Internal Revenue Service - Criminal Investigation Division; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
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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 
