Miami Criminal Attorney Blog

Authorities contend that 3 of every 10 U.S. computer crimes originated in Florida last year in cases where an arrest was made.

The number of Miami residents victimized by computer crimes continues to increase, even as state, local and federal governments continue to pour resources into the prosecution of white-collar computer crimes in Miami. And, as the focus on computer crimes continues to grow, so do the instances of wrongful arrest. In this series, the Miami defense attorneys at Barakat, Jacobs & Associates will look at eBay and computer auction fraud, computer intrusion and search and seizure of e-mails.

Just this week, Reuters News reported that one of the world's most notorious computer hackers, a 28-year-old college dropout from Miami, was sentenced to 20 years in prison after pleading guilty to charges accusing him of helping to run a global computer fraud ring that stole tens of millions of dollars in credit card numbers.

The cost of computer fraud crimes was $560 million in 2009, while the number of crimes has exploded, from fewer than 20,000 in 2000 to 336,655 last year, according to the Internet Crimes Complaint Center.

Nearly 30 percent of all suspected Internet crimes originated in Florida in 2009, more than anywhere in the nation except California. The federal government reports the top financial crimes online continue to be non-deliver/non-payment of merchandise, e-mail scams, identity theft, credit card fraud, auction fraud and purposeful damage of computers through malware, viruses or other attack.

Continue reading " Miami computer crimes, Internet fraud crimes, on the rise" »

Even now, in the depths of South Florida's real estate bust, instances of mortgage and appraisal fraud in South Florida continue to rise, according to statistics provided by the Federal Bureau of Investigation.

The schemes often involved inaccurate property valuations obtained from exaggerated or manipulated appraisals.

Last month, a Jacksonville appraiser was sentenced to four years in federal prison after he and a partner were convicted of purchasing about 55 houses through mortgage and appraisal fraud, the Examiner reported.

Authorities say he inflated the appraisals his partner used to support the purchase price. In that scheme, for example, they would agree to buy a house for $480,000 and then submit an inflated appraisal and obtain loans for $625,000, pocketing the difference.

The top states for mortgage fraud are California, Florida, Georgia, Illinois and Michigan. Additionally, the government reports the downward trend in the housing market through 2009 and 2010 will provide a favorable climate for a continued increase in mortgage fraud claims.

Miami ranks second nationwide (behind Los Angeles) in cases of suspected mortgage fraud, with 5,155 cases identified for prosecution in 2008.

Reports of suspected mortgage fraud increased 36 percent in 2008, to 63,713 complaints, compared to 46,717 complaints in 2007. More than 33,000 cases of mortgage fraud cases were reported during just the first three months of 2009, the latest time period for which statistics are currently available.

The FBI reports that mortgage fraud continues to be a low-risk, high-yield crime perpetrated by all parties, including mortgage brokers, lenders, buyers, sellers, appraisers, underwriters, accountants, real estate agents, land developers and builders.

But plummeting home values can also make appraisal fraud difficult to prove or can subject appraisers to unfair criminal or civil charges. Yesterday's $400,000 house really is today's $200,000 property.

The government defines mortgage fraud as "fraud for property," which typically involves a borrower misstating income to qualify for a loan, or "fraud for profit," which often involves elaborate schemes and multiple properties, straw buyers, inflated appraisals and other schemes aimed at diverting excess proceeds into the pockets of those involved.

Continue reading "Miami ranked second nationwide in mortgage fraud claims " »

A former police officer -- and son of Cape Coral's current police chief -- entered a plea deal last week as part of a $4.2 million mortgage fraud conspiracy, according to the Fort Myers News-Press.

The high-profile case is the latest in a string of arrests for mortgage fraud in South Florida since the real estate market collapsed in 2007.

Earlier this month, two Miami men were sentenced to 45 months in prison for obtaining two fraudulent loans totaling $1 million. The defendant's used the financial information of a mother-in-law to obtain the loans and used a home she owned as collateral, BNO News reported.

In the latest case out of Southwest Florida, the 35-year-old former police officer and four other defendants, including the brother of a Cape Coral police sergeant, pleaded guilty to a charge of conspiracy to commit bank and wire fraud and a count of money laundering. All 5 defendants face up to 30 years in prison at their upcoming sentencing.

The plea agreement contends that three of the defendants, including the police chief's son, made more than $300,000 each, while the remaining men made between $65,000 and $150,000.

According to court documents, two of the men ran a brokerage firm that invested in real estate and flipped properties. In a classic "straw buyers" fraud scheme, the men found houses for sale by owner and used third-party buyers to purchase the properties at inflated prices. The defendant's paid the seller and pocketed the additional money loaned by banks to purchase the properties.

The buyers provided false or inflated financial information on loan applications. Several payments would be made and then the property would be allowed to go into foreclosure.

Continue reading "South Florida mortgage fraud scheme involves police chief's son" »

A Miami couple was accused last week by the Securities and Exchange Commission of running a real estate Ponzi scheme in South Florida-- the latest high-profile arrest in South Florida's battle against real estate fraud.

The SEC accuses the couple of operating a $135 million Ponzi scheme through a real estate investment scam that defrauded hundreds of people, mostly elderly Cuban-Americans in the Miami area, according to the Fort Myers News-Press.

The complaint filed Wednesday in Miami federal court claims the 71-year-old Miami resident and his 73-year-old wife promised unusually high returns (ranging from 9 to 16 percent) on investments in their Royal West Properties Inc.

The couple is accused of using money from new investors to pay off older ones after mortgage holders began to default amid the economic downturn and South Florida's real estate bust. The SEC also accuses the couple of paying themselves $20 million in salaries as well as paying "consulting fees" to children and grandchildren who performed no work for the company.

"(The defendants) used their prominent standing in a close-knit Cuban-American community to ruthlessly exploit vulnerable elderly investors who trusted them with their life savings," Eric Bustillo, SEC regional director of the Miami office, told the Associated Press.

A statement from the couple's public relations firm denied they defrauded anyone and instead blamed business problems on the broader economic downturn.

"It is regrettable that the SEC would so grossly mischaracterize the business difficulties of (the defendants) and Royal West Properties," the statement said. "They too have suffered devastating financial losses."

Royal West's website describes the company's main business as selling property in Cape Coral, Port Charlotte and Lehigh Acres. Both Cape Coral and Lehigh Acres have been featured in the New York Times and Wall Street Journal as poster children for South Florida's devastated real estate market.

The SEC complaint accuses the couple of violating securities registration and fraud provisions of federal securities law. It seeks a halt in business practices, a freeze on assets and unspecified penalties.

Continue reading "Miami couple facing federal charges for alleged Ponzi scheme involving South Florida real estate" »

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" »