Miami Criminal Attorney Blog

The high numbers of mortgage fraud cases in Miami prompted the federal government to hold the first in a serious of Mortgage Fraud Summits here last week.

Representatives of the Financial Fraud Enforcement Task Force, an arm of government formed by President Obama in November to investigate and prosecute financial crimes, is composed of representatives from a wide range of federal agencies and regulatory authorities, as well as state of local law enforcement.

While questions will remain for years about who was minding the store during South Florida's unprecedented real estate boom, there is no question that authorities are attempting to make up for lost time with the zealous prosecution of mortgage fraud cases in Miami and throughout South Florida.

According to the task force, the Miami-Fort Lauderdale-Pompano Beach metro area is ranked first in the nation for Suspicious Activity Reports (SARs) filed by financial institutions that suspect mortgage fraud.

Florida routinely ranks second in the nation, behind only California, for suspected cases of mortgage fraud. In fact, Fannie Mae, the government housing lender, ranked Florida No. 1 in the nation in loan-origination fraud in 2008 and 2009, according to the Miami Herald.

"The mortgage fraud crisis cannot be ignored -- nowhere is the problem more serious than here in Florida," said U.S. Attorney for the Southern District of Florida Jeffrey H. Sloman. "Mortgage fraud puts lenders at risk, and forces homeowners to confront the real possibility of foreclosures, or worse, the loss of their homes."

Since September 2007, federal prosecutors in Southern Florida have charged 282 defendants with mortgage-related fraud charges involving more than $343 million in fraudulent mortgage loans.

As an example, the Herald used the case of 10 Miami-Dade County residents who were indicted in late January on South Florida mortgage fraud charges accusing them of defrauding three banks out of more than $24 million in loan proceeds.

Continue reading "Federal mortgage fraud task force holds inaugural meeting in Miami" »

Miami, Florida: it's not just for drugs anymore. We have white-collar crime with the best of them.

Miami is often referred to as a mortgage fraud hot spot. The question is, does that statement really encompass the boom of economic crime that has been en vogue in South Florida for the past five to ten years. This article will be the first in a series of posts that will examine the crime spree caused by the real estate boom and subsequent bust. We will look at the types of crimes committed, what is being done and what can be done about them, and what to expect in the criminal justice system as a result.

One of the commonly accepted conventions of the real estate boom was that no one asked questions. Everyone seemed to feel that as long as everyone was making money, there was no need to probe too deeply. Banks planned to sell their loans, so they did not do their due diligence on the borrowers. Mortgage & real estate brokers got their commission at the closing tables. So they could care less what happened in the long run. Investors planned to flip properties to other investors like hot potatoes. As long as there was a bigger fool out there, they never looked behind the curtain. So what was it that everyone was studiously ignoring? Buyers had no credit history. Brokers inflated applicants' income. Developers pumped up appraisal values. Appraisers gave the appraisal that we purchased not an independent exam.

What else is clear is that not enough is being done to restore the balance. The police, prosecutors and courts are underfunded and, in many cases, undertrained. Miami is fortunate to have some of the most savvy economic crimes prosecutors in the country, but their numbers are few. Similarly, the detectives who are qualified to investigate a mortgage fraud, appraisal fraud, or Ponzi Scheme are limited and inundated with cases.

This alarming set of facts begs the question: What can victims do and why should suspects be concerned? What's more, how will the real estate ship right itself if the state does not enforce the laws designed to regulate the industry? Keep checking back as we'll explore each of these issues in the coming weeks.

Miami Florida is fortunate to have some of the most sophisticated computer crimes lawyers and law enforcement personnel in the country. The US Attorney, State Prosecutor, FBI, Secret Service, Miami-Dade Police Department and City of Miami Police Department all have specialized units and personal dedicated to investigating and prosecuting Digital Crimes. So why is it that so many of South Florida Crimes seem to be limited to solicitation and e-bay fraud instead of intrusion, hacking, theft of service or the spreading of malicious code.

The answer is simple: corporate victims of computer criminals are often concerned with the PR ramifications of letting the public know about an investigation. I say an investigation not a prosecution. A prosecution shows the corporate victim after they catch the intruder taking affirmative steps to punish the person who dared test their security. An investigation on the other hand is much more nebulous.

During an investigation, no one knows who the perpetrator was. More questions than answers are presented. Not only is the company's security called into question: there is tremendous speculation as to who the intruder is and how they gained access. Were they an employee? Were they a competitor? Is this the first in a series of attacks? Most corporate victims do not want the distraction of having to answer these questions, let alone deal with the fear the unknown answers can cause among their clients and employees.

For this reason it is critical to have an understanding with the investigating agency that the existence of the investigation and the name of the victim will be kept secret until an arrest is made. The members of the Miami Electronic Crimes Task Force have repeatedly professed their commitment to maintaining media silence during the investigation of computer crimes. This makes good public relations sense and follows sound investigative policies.

It is critical that the victim, either directly or thorough their attorney, communicate that desire, not only to the investigating officer, but to the individuals responsible for speaking to the media. In this way, the corporation can control what kind of press release is made and when. By doing so, they can announce that they have captured the perpetrator and make the release a celebration of their responsiveness rather than a roast of their security.