There is an idea, afield, that the US economy faces no risk of a "double dip recession". But if you live in South Florida with an economy tied to real estate speculation like chain to an anchor, the idea of a "double dip" threatening from some kind of recovery seems conjured from a voodoo priest. Despite interest rates dragging along the bottom of historic trends, there has been no recovery in Miami real estate markets, unless measured by vulture investors. The recent Case Shiller index showed that in the last quarter Miami was the only city, except for New York, that failed to show any positive upswing in housing values. But that is not news, here.
What is news is that "a network of Broward County attorneys, law enforcement officers and mortgage brokers" has been indicted by federal prosectors for participating in a $16.5 million scam involving 38 condos and homes in South Florida from 2004 to 2007. (The final paragraph of The Miami Herald report notes that the attorney responsible for the closings is well-known in prominent Republican fundraising circles.) The indicted include a FBI officer. The report reminds of a 2009 Palm Beach Post report of a $41 million mortgage fraud in a wealthy Palm Beach enclave by "investors" from one of the poorest cities in Florida, Opalacka: "Cosmetologist, barber, dental technician, seniors: A cluster of 25 South Florida buyers living within 15 miles of Opa-Locka all picked up millions of dollars in loans, drove 60 miles north, bought a slice of ornate paradise in Versailles, and then defaulted." ("Cluster of buyers from Opa-Locka spike foreclosures of million-dollar mansions in Wellington gated community", Sept 26, 2009, Palm Beach Post)
The "all-in" nature of the housing asset bubble accounts for the miserable difficulty of extracting the economy from the Great Recession (that New York Times journalist Paul Krugman is calling, the Third Depression). How else to interpret what is likely to happen to the economy, except through the failed expectations of the recent past? The top of the real estate market was 2005, and yet the alleged fraudsters in today's report continued for another two years. Indeed, the prevailing notion for the most recent two years-- since the stock market collapse-- is that the economy will return to the "normal" of that was expected in 2005, when even speculators from law enforcement backgrounds believed that fudging documents to qualify for more loans was no greater error of judgment than playing a few more hands at the blackjack table.
Bloomberg reports on the recent Case Shiller analysis: "... Case said, home building, which has driven the economy during past economic expansions, “is dead flat in the mud.” Housing starts have been at 15-year lows for the past 18 months, and vacancy rates are increasing, he said. “The unwritten story here is what’s going on with household formations and the pattern of them,” the Wellesley College economics professor said today in an interview with Tom Keene on Bloomberg Surveillance. “The census is telling us that households are being formed, but they don’t seem to be showing up.” Case attributed this disconnect to fewer immigrants and more emigrants, as well as the “doubling-up phenomenon” where more people choose to live together or reside with their parents."
Fictions piled on fictions. Incredible.
Posted on Wed, Jun. 30, 2010
Feds: Mortgage fraud ring included cops
BY JAY WEAVER, JAMES H. BURNETT III AND AMY SHERMAN
jweaver@MiamiHerald.com
A network of Broward County attorneys, law enforcement officers and mortgage brokers are accused of falsifying a slew of documents to obtain $16.5 million in loans that they used to buy and flip properties during the real estate boom, according to an indictment unsealed Wednesday.
Federal prosecutors said the Broward-based group was organized by ex-Plantation police officer Joseph Guaracino, who recruited five other current and former cops in that city as well as a Lauderhill officer and an FBI agent. They allegedly posed as "straw'' buyers who pledged to buy and live in 38 condos and homes in Broward and Palm Beach counties.
The defendants, arrested Wednesday, are accused of conspiring to submit false income records, job descriptions, bank statements and loan applications to dupe lenders in South Florida and elsewhere from 2004 to 2007.
But their real goal -- disguised by the false paperwork -- was to rent the properties and then sell them, thereby "realizing substantial profit,'' according to the indictment.
Without working together as "straw'' buyers looking for primary residences, the individuals would never have been able to quality for so many mortgages and generate handsome profits, the indictment says. Some of the profits were used to purchase even more homes.
The real estate closings were handled by prominent Fort Lauderdale attorney Steven Stoll, who owned a title company, and Boca Raton lawyer Stephen Orchard, who worked with Stoll. The title attorneys falsely represented to the mortgage lenders the source of the down payments from borrowers needed to close the transactions, according to the indictment returned Tuesday by a federal grand jury in Fort Lauderdale.
Stoll's attorney Robert Nicholson on Wednesday defended his client, saying, ``Steve Stoll is very disappointed the government has decided to ignore the substantial evidence of his innocence.''
Two other mortgage brokers and a processor who worked for Stoll were also charged.
Although the law enforcement officers didn't use their positions to carry out the alleged mortgage scheme, their case stands out amid a recent flurry of federal loan fraud prosecutions because it involves eight current and former law enforcement officers. The 13 defendants named in the indictment will have their first appearances in federal court Thursday.
`BETRAYED'
``This indictment charges a group of individuals who conspired to enrich themselves by committing mortgage fraud,'' said U.S. Attorney Wifredo Ferrer. ``It includes a number of professionals who betrayed their profession for greed, and in the process, undermined the integrity of the mortgage marketplace on which we all rely.''
Among others named in the indictment: Joseph Guaracino's brother, Dennis Guaracino Jr., and John Velez, both former Plantation police officers. Velez, a former SWAT team and Street Crimes Unit member, was named Plantation Police Department officer of the year in December 2004.
Also charged: current Plantation officers Daryl Radziwon, Casey Mittauer and Joseph DeRosa, along with Lauderhill officer Joseph LaGrasta.
FBI agent Robert DePriest, of Plantation, was also arrested. An FBI spokeswoman declined to comment.
In a statement, the Plantation Police Department said that in June 2007 it became aware that several of its officers were possibly involved in mortgage fraud and requested the assistance of the Florida Department of Law Enforcement to investigate.
FDLE, along with the U.S. attorney's office, notified the department in January that three of its officers were targets of a probe. They were immediately placed on administrative leave with pay. On Wednesday, their status was changed to unpaid leave.
One of the officers, Mittauer, used to be a volunteer assistant baseball pitching coach at Dade Christian School, his alma mater.
Lauderhill Police said Wednesday that LaGrasta was placed on paid administrative leave, but declined further comment.
The two mortgage brokers charged in the indictment were Matthew Gulla and Rene Rodriguez Jr.
Jacqueline Trumbore, who worked for Stoll's company, TurnKey Title Corp., was also named in the indictment. She handled real estate closings and later became another straw buyer in the alleged real estate scam, the charges state.
WELL-KNOWN
Steven Stoll and wife Rebecca are well known in Republican and philanthropic circles in Broward.
Stoll let Republican activists use his mortgage company office to phone bank for Republican candidates, and the Stolls sometimes attended fundraisers, said Bob Wolfe, a Broward Republican activist.
Stoll was one of the lawyers who fought with Broward's canvassing board about the 2000 presidential recount.
He has given to a handful of federal Republican candidates since 2000 -- including $4,800 to Gov. Charlie Crist, who is running for U.S. Senate.
© 2010 Miami Herald Media Company. All Rights Reserved.
http://www.miamiherald.com
Read more: http://www.miamiherald.com/2010/06/30/v-print/1709699/feds-mortgage-fraud-ring-included.html#ixzz0sQPODtBq
3 comments:
As I've said before the idea of an "economic recovery" is the most outlandish fiction the people are being plied with since the crash of 2008. It ain't going to happen. We are on a slow descent which will become steeper in the days ahead. We are bound for a world of naked economic nationalism, the fall of governments around the world, the rise of fascism, and wars over dwindling energy supplies.
As a service to my fellow residents of Miami-Dade let me try to regularly post the "collapse news" of the day. For instance, the iconic Biltmore Hotel's request to the City of Coral Gables for a two year grace period before they make scheduled loan payments to the city, the rupture of sewer pipes and the dumping of toxins into the sea, the loss of $50 million dollars of Medicare funding to Jackson Memorial from recent federal legislative decisions, the inability to report out FCAT scores by the state's chosen testing company, the rise of drug addiction rates and related problems reported in today's Herald, and on and on...
Well until tomorrow's new list of the signs of collapse, be well people and read Joe Bageant if you can. Great insights to be had in that. And Genius please stop placing so much effort into shaping electoral politics. The whole cast of buffoons, Scott, Sink, Greene, Rubio, Meek, Crist, McCollum, etal are lost. They have no answers because there are no answers left to our capitalist economy. All that's left is for it to die.
Boy, reading Malcolm's comment I can't wait for Dec. 2012 to get here so we all get wiped out for good.
Do you think it was 'fair' or 'newsworthy' to this story that they mention the guy was a Republican supporter? Maybe I'm missing something, but I don't necessarily see the relevance of his political affilitions to the fact that he committed these crimes.
Wow! Purple haze all in my Brain lately things they don't seem the same.....
You hear it Malcolm?
What Capitalist economy? this country hasn't seen a capitalist economy in over 100 years.
This is the result of a slow insidious socialist economy.
I guess the Greek, Spanish and Portuguese economies are examples of unbridled capitalism.
Cops comitting fraud? Unheard of, impossible, say it ain't so G.O.D.
Malcolm is right about one thing more pain to come. Pass the bong or the dilaudid.
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