Texas Criminal Lawyer Blog

Along with the acceleration of foreclosures in the rapidly falling real estate market comes the inevitable increase in Mortgage Fraud Indictments by Federal Grand Juries in Texas and other Federal Districts throughout the United States.

Federal Mortgage Fraud ranges from deliberate overstatement of income by borrowers in order to qualify for larger mortgage loans, to complex schemes by multiple parties to defraud lenders of large amounts of cash. These indictments involve borrowers, lenders, appraisers, real estate brokers, loan brokers, bankers, and, yes, even attorneys.

Mortgage Fraud Rings will use a "straw borrower" with a good credit report together with an appraiser to overstate the value of the mortgaged property, along with a participating property owner and a dishonest attorney to prepare duplicate sets of HUD closing documents. Some of these complex white collar frauds can go on for a number of years and involve many different parties. For example, a recent case in California has resulted in a guilty plea by a mortgage company loan officer to lying under oath to a Federal Grand Jury in connection with a mortgage fraud investigation extending from 2001 to 2006. In that case, the loan officer had lied about taking over $100,000 from a mortgage broker to process fraudulent loan applications referred by the broker.

Some Federal Districts have been prosecuting cases involving multiple loans taken out by a buyer or buyers for the same house at the same time. After funding, the buyer often leaves the country with the money. This practice is often referred to as "Shotgunnning".

"Cash Back" schemes are another method of mortgage fraud where a buyer and seller or buyer and real estate agent conspire to deceive the lender as to the sale price of the mortgaged property, and then the buyer gets a cash kickback which of course is not disclosed to the lender.

Federal Mortgage Fraud cases can also involve failure to disclose liabilities and overstatement of income by mortgage applicants. These type cases can insnare the unwary applicant who might lack any criminal intent, but who might find himself the subject of a Federal Indictment because of a "puffed up" financial statement or a sloppy or inflated Mortgage application.

All of the Federal Judicial Districts in Texas have a number of these cases on their dockets, and the FBI is busily investigating many others. They are expensive to defend, and must have proper investigation and preparation by competent white-collar defense attorneys skilled and experienced in these areas. As is the case with all white-collar cases, a good lawyer should be contacted as soon as an individual thinks he or she may be a target of such an investigation.

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Posted by Michael J. Brown | Permalink | Email This Post

Posted In: Federal Crimes

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The United States Supreme Court returned two decisions this week which should result in more discretion for sentencing judges. Before these decisions, Federal District Judges were required to justify departure from The Federal Sentencing Guidelines, which were passed by Congress to limit the sentencing power of Federal Judges. One of the cases, Gall v. United States, involved a college student sentenced to 3 years probation for involvement in an ecstasy drug distribution ring. The Guidelines called for 30 to 36 months in prison. The United States Court of Appeals for the Eighth Circuit reversed this sentence, ruling that such an "extraordinary" variance required an equally extraordinary justification. Not so, said United States Supreme Court Justice John Paul Stevens; rather, he chided the court of appeals for failing to give deference to the District Court's "reasoned and reasonable decision." In other words, the Supremes told the lower appellate courts to lay off the trial judges and let them make their own sentencing decisions, and not to overrule them just because those decisions were outside the guidelines.

The other decision, Kimbrough v. United States, returned at the same time, overturned a 4th Circuit Court of Appeals' reversal of the sentencing District Judge's departure from the Guidelines based on his disagreement with the disparity in sentencing between crack and powder cocaine offenses. Justice Ruth Ginsberg reasoned that since Congress had not blocked recently amended guidelines lowering the penalty for crack cocaine, then judges should also have discretion to depart from the Guidelines themselves, and that it was not unreasonable for them to do so.

To add more to the mix, on Tuesday the U.S. Sentencing Commission voted to make retroactive their previous decision to lower the guideline sentences on crack cocaine offenders. This means that more than 19, 500 Federal prisoners will be free to seek reductions in their crack cocaine sentences.

I think these decisions will result in an increase in the ability of sentencing U.S. District Judges to sentence according to their own take on the entire set of facts before them; that is, the Guidelines will be but a single factor, and the judge can take many more factors into consideration in sentencing rather than blindly following the Guidelines.

Posted by Michael J. Brown | Permalink | Email This Post

Posted In: Drug Offenses , Federal Crimes

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Sean Taylor, the Washington Redskins all pro safety recently shot and killed in his home during the course of a burglary, was shot by only one of the four individuals arrested in connection with the crime. However, all four men can be charged with murder in the course of the burglary, which in some states, Texas especially, can be a Capital Crime; that is, a death penalty case. While it is unlikely that all four will face such charges, the law of principals can make all four men responsible for the consequences of the initial crime of burglary.

One youth claims only to be along for the ride. None claim intent to kill anyone, and only one man acually shot the victim. This is very common in criminal defense cases. It is entirely possible that no one, even the shooter, expected a death to result from this home burglary. Nevertheless, they were in somone's home in the middle of the night without the owner's knowledge or consent, and whatever happens after that is on them.

It is every parent's nightmare that his or her child will be "in the wrong crowd" when something serious occurs, and will be arrested and face criminal charges as the result of another person's actions. Many highway stops result in multiple charges involving only a small amount of drugs found in a car occupied by three or four young people, all of whom are charged. Many times all the evidence has to show is knowledge that the drugs were there. This can be proven by direct evidence, or circumstantial evidence.

In Federal Court, powerful Conspiracy laws can bring in many defendants, some of whom don't even know each other and have no idea of another person's participation in the conspiracy. A single "overt act", on the part of an individual can bring him or her to Federal Court facing many months or years in prison.

(Expand more on degrees of criminal responsibility.) How they may be charged.

Posted by Michael J. Brown | Permalink | Email This Post

Posted In: Arrest

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