Nearly four years later, case #F-08-036522-D comes to an end.

In an anticlimactic hearing yesterday morning at 9 am, the state announced that it's dropping the charges against the final remaining defendant in the Bernardo Barrera mortgage fraud case.  Just like that, in less than 15 seconds, the state attorneys office told Judge Thomas Rebull that they weren't going to proceed with the case against the "D" defendant that prosecutor William Kostrzewski railroaded nearly a year after the original arrests were made bringing to an end what could be described as one of the most botched mortgage fraud investigations on record.  What's really disgraceful about this last defendant even being charged was that by prosecutor Kostrzewski's own admission, he knew he was innocent but was only charged so he could then testify against the other defendants.  In other words, hey, fuck you, I've gone ahead and thrown your ass in jail even though I knew you had nothing to do with the crimes I'm charging you with so that you could come on in and spill the beans against the other defendants.  Some moral code prosecutor  Kostrzewski abides by, right?

Bernardo Barrera

Basically what did the states case in against this defendant was the insurmountable mountain of evidence against the man that Prosecutor Kostrzewski identified as the victim of this fraud, Bernardo Barrera.  Early on in our blog we identified several problems with Mr. Barrera's assertion of not being involved with the fraud that was at the center of the case but the icing on the cake came when we decided to go ahead and submit all the documents pertaining to the fraud to a handwriting expert.  I gathered up samples of Mr. Barrera's signatures from his divorce paperwork and the documents relating to the purchase of his primary residence, these samples along with signature samples from the purchase and loan documents from the mortgage that he alleged he was not involved with were all bundled together and sent off to a handwriting expert, check out the results of the handwriting experts analysis for yourselves...

Notice that this handwriting analysis was done on December 10, 2010, almost a year and half before the charges were dropped.  So there you have it, according to the handwriting expert, Mr. Barrera signed all the documents pertaining to the purchase and subsequent mortgage of the house that was at the center of the states case, the same house and mortgage that he vehemently denied, under oath I may add, that he had absolutely nothing to do with.  I spent roughly $1,300 on expert that the state should have used before they charged anyone in this case.  

Ultimately it was this handwriting analysis that ended up getting the case dropped against this last remaining defendant.  What's really a shame about this case, that is aside from innocent people's lives being unnecessarily destroyed is the fact that the biggest fraud perpetrated throughout this story was the fraud that Bernardo Barrera committed against the court by lying about his involvement in this fraudulent home purchase and subsequent fraudulent mortgage used in the commission of this fraud.  What's worse?  The fact that prosecutor Kostrzewski's bungling of this case ended up embarrassing the state attorney's office and the then newly formed Mortgage Fraud Task Force.  Luckily the state attorneys office removed this inept jackass and replaced him with prosecutors that were able to rectify the mistakes he made.

Eric Padron

I have to wonder, now that the state is well aware of Bernardo Barrera's involvement in this fraud are they going to hold him responsible and charge him not only for mortgage fraud but for perjuring himself throughout this case?  Think about what this case has cost the state as well as the defendants who were eventually exonerated, shouldn't he be made to pay?  Only time will tell.  In the mean time, congratulations are in order for Attorney Eric Padron who worked diligently and earned this hard fought victory for his client as well as the head of the state attorneys mortgage fraud unit, David Sherman, who rectified the errors that were made by prosecutor Kostrzewski.

So what now to the two assclowns that put this case together?  What say you Mr. Kostrzewski?  How about you Detective, sorry Officer Baluja?  How do you feel about your victim now or this steaming pile of shit you called a case?  And what about you Mr. Barrera?  I know you read this blog from your hideout in Panama, remember what I told you a few years back, I'm not gonna stop till your ass is behind bars.  Take that shit to the bank.

Major development expected in the Bernardo Barrera mortgage fraud case today...

Amazingly enough, over four years later, the state is still dealing with the first mortgage fraud case that we wrote about, the Bernardo Barrera mortgage fraud case.  For those of you who aren't familiar with this case, go back and type in "Bernardo Barrera" in the search box on the upper left corner of the page and enjoy.  In a nutshell this case was hastily thrown together in the middle of the night by a morally, ethically and mentally deficient prosecutor named Bill Kostrzewski who used an even dumber cop named Jorge Baluja to do his bidding.  Of the three people originally charged back in October 3, 2008, one immediately cut a deal and got several years probation (essentially his attorney sold him out and didn't defend him), the other eventually after several plea negotiations ended up doing several years in prison while the third defendant, despite the prosecutors best efforts, ended up getting all the charges dropped against her.


What I neglected to tell you guys was that there was a fourth defendant, one that wasn't charged until nearly a year after the original arrests.  Once the prosecutor on the case realized that he had royally fucked up and saw the case falling apart around him, he decided to bring in a fourth defendant almost exactly a year to the day of the first arrests.  I never mentioned anything about this fourth defendant because I didn't wan't to jeopardize his defense, needless to say, there was no case against this fourth defendant yet somehow it's taken the state almost three years to come to that conclusion.  From what I've been told, it looks like the state will drop the charges against this poor guy today.  I'm headed to court this morning to see what happens.  We'll report tomorrow...

Banks ready to pay $20 billion dollars to get themselves out of trouble stemming from the mortgage meltdown and FINALLY! A mortgage fraud task force that's targeting the banks rather than the borrowers!

I couldn't believe what I was reading this morning, after all the years of maintaining that the real criminals in the mortgage and real estate meltdown was the banks, we finally have some validation to our claims.  Today we've learned that the banks at the core of the mortgage meltdown are willing to pay $20 billion dollars or more to win releases of liability from future claims that could arise from their lending practices!  From the Bloomberg article...

A push by U.S. banks to win broad liability releases has become one of the main obstacles in talks to resolve a nationwide probe of mortgage-servicing and foreclosure practices, two people briefed on the matter said.
The mortgage servicers want protection from additional state and federal claims over their mortgage practices as part of reaching a settlement that may exceed $20 billion, according to the people, who declined to be named because the talks are private. The banks are seeking releases that go beyond servicing of mortgages to include lending and securitization of loans, one of the people said.

Of course they want to settle, $20 billion is chump change compared to what their potential exposure could be.  But not so fast...

That effort has encountered resistance from at least two states. Delaware Attorney General Beau Biden and New York Attorney General Eric Schneiderman, who are investigating the bundling of mortgage loans into securities, don’t want their probes blocked by a broad settlement of liability.
Biden said he has “strong reservations” about a deal that provides releases related to practices such as securitization and lending, because servicing is the focus of the nationwide settlement talks.
“We have an investigation going on. It would hinder our ability to do that, so that’s why I have real reservations,” Biden said in an interview. 

“Attorney General Schneiderman remains concerned by any settlement agreement that would preclude state attorneys general from conducting comprehensive investigations of the mortgage crisis,” Danny Kanner, a spokesman for the attorney general, said in an e-mailed statement.

Biden said it would be “imprudent” to relinquish claims in areas that haven’t been fully investigated.
“I hesitate to release those claims and those potential liabilities mostly because we’re still in the midst of investigating many of the other related issues,” he said. 

Could this be real or simply some state attorney generals that are raising objections simply for political gain?  Here's the best part, a quote from the CEO of JPMorgan Chase, Jamie Dimon...

“I would do anything to get it done today,” Dimon said July 14 about a settlement, according to a transcript of the company’s second-quarter earnings call.

NO SHIT?  He'd do anything to get this settlement done today?  How often do you hear people that are this eager to give away TWENTY BILLION DOLLARS??!!  Remember, by settling the banks will be absolved of all civil and criminal liability, so of course they're eager to settle.


Now comes the best part, California Attorney General Kamala Harris has created a mortgage fraud task force that's going after the LENDERS who were at the epicenter of the mortgage/real estate meltdown!  Better late then never!  From the L.A. Times...

California Atty. Gen. Kamala Harris, saying that years of unscrupulous lending still haunts the state, is creating a 25-person task force to target mortgage fraud of any size — from small operations that preyed on troubled borrowers to corporations that sold risky loans as safe investments.
The team of 17 lawyers and eight special agents from the state Department of Justice will pursue three major areas, Harris said in an interview:

•Corporate fraud, including instances in which bundled mortgages were sold as securities to the state or its pension funds under false pretenses. Harris said her office plans to prosecute some cases under California's False Claims Act, which she described as "one of those very powerful tools that California uniquely has … to pursue, in essence, what are false claims that are submitted to the state."
•Scams, including instances in which consultants, lawyers and others took fees from people in foreclosure, saying they would help the homeowners get loan modifications or other remedies, but delivered nothing.
•Fraudulent lending practices, including deceptive marketing, failure to fully disclose loan terms and qualifying people for loans who couldn't afford the terms.
Harris said the mortgage fraud that ultimately led to the housing crash continues to be a drag on the state, causing huge losses in jobs, property values and state revenues.
"We are looking at a situation of up to $640 billion in wealth having been lost because of this wave of foreclosures that has hit the state," Harris said, referring to the decline in homeowner equity. "There is a direct connection" between mortgage fraud "and the issue that we are challenged with in terms of our state budget crisis."
Creation of the state's Mortgage Fraud Strike Force, which Harris will announce at a news conference Monday in Los Angeles with Mayor Antonio Villaraigosa, comes as other states turn up the heat on the lending industry.

Harris said that although successful prosecutions of major players in the mortgage meltdown have been difficult, the severity of the crisis called for a tough-minded approach to mortgage fraud, one that could target executives of major financial institutions.


"If the evidence leads us there, no case will be too big or too small to pursue," Harris said. "There remain millions of people affected by the mortgage crisis."

Fantastic.  I wonder though, why hasn't the Miami Dade State Attorneys Office set up a similar task force?  Why is it that the SAO down here refuses to go after the lenders?  It's been four years since the task force was created and they're still stuck on prosecuting small time fraudsters, why not go after the big guys, the people that actually fueled the mortgage meltdown?  The task force is no longer made up of inept and incapable prosecutors like Bill Kostrzewski, the men and women working their now are experienced and highly capable, so why not put together a case targeting the lenders who caused this mess?

Even if the banking industry ponies up the $20 billion and gets away from any liability for playing an indispensable role in the mortgage/real estate meltdown, they'd still be acknowledging some sort of responsibility in the crisis that ultimately brought our economy to it's knees.  That at least in my opinion is huge, suddenly the defendants in cases like the Plantation Cops mortgage fraud case who claimed that the banks were the villains don't seem so far off base. 

The Straw Buyer interview number one...

We mentioned last week that we had sought out people involved in the Barrera mortgage fraud and asked them a few questions regarding the home located at 3390 Oak Avenue which was used by John Arthur Romney to defraud Citi Mortgage out of nearly $400,000.  The first person that we decided to track down was the realtor who sold Mr. Romney the home for $185,000 which he later flipped to Mr. Barrera or someone posing as Mr. Barrera for $600,000.  After digging through the records we found that the realtor was one Betty Wilburn.

Betty tells us that her client was Maxine Andrews, the little old lady that sold the home to John Romney, Maxine's husband had died and she remained at the house on Oak Avenue after his death.  The property was listed through Mrs Wilburn and was appraised at approximately $300,000; however Maxine was fed up and tired of being in that area.  Maxine was anxious to leave the area which she subsequently did and moved up north.  Fair enough.  She went on to say that a man named John Romney whose name she recalled because of the similarity to then presidential candidate Mitt Romney came by to visit Maxine regarding her home.  Maxine subsequently contacted Betty and stated that a man named John had knocked on her door and said that he would buy the house for cash.  John (Romney) offered Maxine $185,000 for her home, Betty tried to convince Maxine not to accept the offer since the home was appraised for more but Maxine insisted that she wanted to sell the house and get out of town and that after being on the market for nearly a year, this was the only offer they had ever received on the home.  Otherwise Maxine said that she would abandon the house and let it go into foreclosure.


So far so good right?  Nothing earth shattering here, widow wants to sell her house in a bad area and get out of dodge, there's a buyer standing at the door with $185,000 in cash and the realtor wants the seller to hold out for more money.  Here's were it gets good, Mrs. Wilburn recalls having a conversation with John Romney during which time he advised that he wanted to buy more homes in the area and that he was trying to buy the home across the street from Maxine's. 

Did anyone catch that?  We'll discuss tomorrow...

Other homes in the area...

Before we get to the interviews we mentioned yesterday, I think we need to revisit some of the homes that we discussed last summer that surround the Oak Avenue home that was at the heart of the Barrera mortgage fraud case.  The first two are particularly important since they are directly across the street from the home used in the Barrera mortgage fraud.

How can we forget 3379 Oak Ave?  Last sale December 2008, sales price $397,000 or $616.00 PER SQUARE FOOT!


Or just next door, 3375 Oak Ave, last sale date September 2008, sales price $490,000 or $425.00 PER SQUARE FOOT!


Around the corner...

3551 Frow Ave, last sale May 2008, sales price $500,000 or $438.00 PER SQUARE FOOT!


and just a few doors away...

3309 William Ave, last sale June 2008, sales price $450,000 or $511.00 PER SQUARE FOOT!


One more...
3146 Hibiscus St, last sale June 2008, sale price $490,000 or $471.00 PER SQUARE FOOT!



We discussed these transactions in detail last summer (here, here and here), we've learned recently they may have much more in common.  Notice all these homes that we mentioned were within one square mile of each were all purchased within months of each other.  Coincidence or brilliantly engineered scam to loot this poor area of Coconut Grove?  We'll discuss on Monday...

Another anniversary...

Depending on how you look at it, yesterday was the three year anniversary of the Miami Dade County Mortgage Fraud Task force's first arrests or the two year anniversary of the Bernardo Barrera mortgage fraud arrests.  So where are we at three years later?  We discovered last week that the we're knee deep in a foreclosure fraud crisis where it's not the borrowers that are committing fraud but the banks through submitting fake and forged documents to the courts.  Does anyone think that the members of the Miami Dade County Mortgage Fraud task force is working over time to prepare cases against these guys?  We also learned a few weeks back that the City of Miami Commissioner Marc David Sarnoff may have committed mortgage fraud, does anyone believe that the people over at the mortgage fraud task force are busy investigating these allegations and preparing a case against him?  Don't hold your breath.


So here we are three years since the inception of the Mortgage Fraud task force that was supposed to be a model for the rest of the nation and what's the impression we're left with?  Based on everything I've seen the only impression I'm left with is selective enforcement of the law.

Researching a new case and some technical difficulties...

We seem to be having some sort of problem with the google blog template, so it's going to be short today.   We've stumbled upon more of Assistant State Attorney Bill Kostrzewski's mortgage fraud handy work, check the charges he filed on this defendant...

Anyone wanna guess how this case ended?  Have a great weekend!

Introducing The Straw Buyers "Moron of the Week", attorney David Alschuler.

Just when I think I've gone through every single document relating to the Bernardo Barrera mortgage fraud case, I trip upon something new.  Today we've stumbled upon a report from the court appointed guardian in the foreclosure case that arose from the Barrera mortgage fraud.  From what I'm told the court appointed a Guardian Ad Litem (GAL) to look into the claims of an impostor posing as Mr. Barrera at the closing and if indeed there was an impostor to determine whether the impostor had an interest in the property to effectuate service in the foreclosure case.  Simple enough to understand right?  The court appointed an attorney named David Alschuler to act as the guardian, surely in his role as a guardian Mr. Alschuler left no stone unturned in his effort to find out whether or not there was an impostor right?  Let's take a look at  his report...

David Alschuler Guardian Ad Litem Report for Bernardo Barrera Mortgage Fraud Case

Fantastic!  That's some investigation that Mr Alschuler conducted before he wrote that report, huh?  So what exactly did Mr. Alschuler do to prepare for this report?  Apparently he first read the police report and comes up with this...

Brilliant!  Mr. Barrera "did all of the right things"!  Of course he did.  How about all those letters that Citi Mortgage sent Mr. Barrera before the closing actually occurred Mr. Alschuler?  Of  course Mr. Barrera received several alerts from the credit monitoring services, yet somehow he missed all the alerts that they sent out before the closing for the fraudulent home purchase?  How about them signatures Mr. Alschuler, did you bother to look at them?  We certainly did!  Nice work there Mr. Alschuler!

So what did Mr. Alschuler do next in his quest for the truth?  He read the Miami Herald!

From the looks of it, Mr. Alschuler read the Herald article regarding the Barrera fraud and practically copied it in his report, inaccuracies and all.  Once again, nice going there.


Last but not least Mr. Alschuler summarizes a conversation with Assistant State Attorney Bill Kostrzewski...

...and concludes that he cannot locate John Doe aka the impostor who showed up at the closing posing as Bernardo Barrera.  Considering the facts that we've laid out Mr. Alschuler you may want to reconsider your findings, the impostor may have been right in front of you all along.

It's one thing for a stupid cop to over look important evidence in putting together a case, but it's something else all together different for an independent attorney that has no interest in whether or not the defendants that were charged are prosecuted to do such a piss poor job in investigating the case.  With that said, considering the effort that Mr. Alschuler put into his investigation of the Barrera mortgage fraud and his woefully inadequate GAL report, we crown him the inaugural Straw Buyer MORON OF THE WEEK!

Attorneys Steve Stoll and Stephen Orchard from the Plantation cops mortgage fraud case being investigated by the Florida Bar...

Due to the tropical storm last Friday that never came , we here in South Florida had an unexpected long weekend.  The Straw Buyer and family attended a couple of barbecues and kicked back, wifey had a bit too much to drink though...

Looks like the Florida Bar is investigating both the attorneys that were arrested in the $16mm Plantation Cops mortgage fraud ring.  From the AP article...

Steve Stoll, a politically connected Republican attorney in Fort Lauderdale arrested last month in a mortgage fraud case, is now under investigation by the Florida Bar.
Florida Bar spokeswoman Karen Kirksey declined to provide specifics except to confirm that Stoll and fellow lawyer Stephen Orchard, also indicted in the fraud case, are under investigation.
In June, a federal indictment detailed how a group of attorneys, police officers and mortgage brokers falsified documents to obtain $16.5 million in loans they used to buy and flip properties.
Stoll's attorney, Robert Nicholson, who has said his client is innocent, was unaware the Bar was investigating but wasn't surprised. ``The Bar as a matter of course opens an investigation anytime a licensed attorney is charged with a criminal offense.''
Stoll and his wife, Rebecca Stoll, a former North Broward Hospital District commissioner, are familiar names in Broward political circles. They have supported candidates in recent years, including Gov. Charlie Crist in 2006 and in 2009 and Bill McCollum in 2009, and raise money for the Fort Lauderdale Museum of Discovery and Science.
-- AMY SHERMAN

Uh oh, that certainly doesn't sound good for the lawyers involved now does it?  Throughout the course of our blog we've noticed that the Bar has moved at glacial speeds against the attorneys that have been charged with crimes, yet in this case they seemed to be moving quickly against these two.  What struck me as strange about this article was the following quote from Mr. Stoll's attorney...

`The Bar as a matter of course opens an investigation anytime a licensed attorney is charged with a criminal offense.''

Is that right?  If indeed that is the case, what happened with the attorney from the Miami Dade County Mortgage Fraud Task Forces inaugural case, Attorney David Rodriguez?  You all remember him don't you?  This was the attorney that was charged with setting up an illegal home purchase where the buyer was getting tens of thousands of dollars from the closing without the lenders knowledge as well as paying off the sellers mortgage weeks before the closing actually occurred according to the state.  He was also accused putting the deal together with an undercover cop acting as the sellers accountant.  With those kinds of allegations, surely Mr. Rodriguez had some sort of investigation initiated by the Bar regarding his alleged involvement in this fraud, but as we mentioned before, there's no record of any discipline arising from this incident...

We're gonna take a closer look and see what we can find...

Fraud, fraud, fraud! Why so quick to scream fraud?!

What's up with that?  Why is everyone investigating these mortgage fraud cases so quick to conclude there was fraud without properly investigating?  We've been told by several of our readers that the banks own investigators are so overwhelmed with mortgage fraud cases that they don't have time to properly investigate the cases the way they should be.  We've seen first hand that the cops running mortgage fraud cases can't even grasp the fundamentals of the real estate and mortgage business, yet they're the first ones to slam together a case and start cuffing people.  Why?  What's the rush to classify these cases as "fraud"?


Let's look at it from the banks point of view, why would they rush to claim there was fraud?  One hypothesis that we presented earlier in our blog was that the banks had some way of getting reimbursed if they classified these mortgages that had gone bad as fraud.  That certainly sounds plausible doesn't it?  Isn't that type of business that brought AIG and Lehman Brothers down?

Why are the cops so eager to conclude there was fraud and slam together a case?  Our guess at least with the Bernardo Barrera case was that the Miami Dade County Mortgage Fraud task force needed a case to mark the one year anniversary of their first arrests.  Was it a coincidence that the arrests in the Barrera case were made on October 3, 2008 and the task forces inaugural arrests were made on October 3, 2007?  Prosecutor Kostrzewski later confessed that "he was under a lot of pressure" to put the case together, why?  Look at that October 3 date from the perspective of the money hungry Chairman of the mortgage fraud task force that was desperate for federal funding, is it just a coincidence that the arrests were made two days after the beginning of the fiscal year?  Check out Prosecutor Kostrzewski's handy work with the plea agreement for Michael Martinez...

Martinez Plea

Check this bit...

"As a special condition of Community Control and probation, defendant shall make payments of not less than five hundred dollars ($500.00) per month to victim Citi Mortgage, Inc., or to its successor(s), or, in the event that Citi Mortgage, Inc., is reimbursed for its loss by title insurance, to its insurer of title."

Boy, it sure is nice to know that the prosecutor is so concerned about Citi Mortgage or its insurer to get their money back.  In fact this very plea agreement is going to come back and bite the prosecutor in the ass, the testimony that Mr. Martinez gave the prosecutor was pure bullshit.  The fact of the matter is the prosecutor wanted so desperately to have some sort of testimony against the attorney that he charged, that he bought whatever came out of the guys mouth hook line and sinker.  I can't discuss details right now, but let's just say that there is irrefutable evidence to completely disprove nearly everything the witness said regarding his interaction with the attorney, but the prosecutor wasn't going to hear it.  Not only did he believe everything the guy said, but as evidenced by the plea agreement, he gave him a sweetheart deal and sent him on his way without ever investigating any of his claims.  Nice work Bill!


How the hell can everything get so ass backwards?  We proved beyond a reasonable doubt (at least in our opinion) that the man who claimed his identity was stolen, Bernardo Barrera, was completely full of shit, yet he got away scott free.  While the mortgage brokers and their associates got arrested in the Plantation cops case, the mortgage brokers in the Barrera case got away without even being questioned!  What about the appraiser that appraised the Oak Avenue home that was at the center the Barrera fraud for three times more than it was appraised for just one month earlier?  Why wasn't he never questioned?  WTF?!


This brings me back to the Plantation cops case.  Somehow I can't reconcile that mess, wtf happened there?  What kind of trouble were the mortgage brokers in that led them to cut deals and help build the case against the cops?  Were any of the homes that were at the center of that case even in foreclosure?  As far was we can tell from the indictment, the homes were rented, mortgages being paid and everything seemed on the up an up?!  What gives?  We're going to have take a closer look at that case.

While we're here trying to decipher this nonsense, look what the Talibans been up to, TRAINING MONKEYS TO BE TERRORISTS!





YIKES!  Maybe the Miami Dade County police department might want to think about training monkeys to investigate mortgage fraud, they couldn't do any worse than Detective Baluja!

Some rumors and John McCain's new hybrid car...

Sorry folks, we're running late this morning so today's post has to be brief.  Apparently ASA Bill Kostrzewski is on vacation till next week, there's some noise about consequences regarding his handling of the Bernardo Barrera mortgage fraud case when he gets back.  As I said, it's nothing but an unsubstantiated rumor at this point, we'll report as soon as we hear anything else.  We've also been told that Detective Baluja is experiencing a tremendous amount of stress over the outcome of the Bernardo Barrera mortgage fraud case, I wonder why?  

On another note, John McCain seems to have discovered a car that runs on water...

The buck stops where?

You've all heard that old saying but what exactly does it mean when we're talking about committing a crime?  If during the course of writing this blog somehow I commit a crime, could you imagine the CEO of Google getting arrested?  Sure the company that provides the template for this blog may have some civil liability if I go nuts and commit a crime, but how could they have any criminal liability?

Could you imagine if Detective Jorge Baluja were to have committed a crime during the course of one of his investigations?  Would the police chief arrested for the Detective's crimes?  Or worse, if a prosecutor like Bill Kostrzewski were to commit a crime during the course of a prosecution, would it make sense for his supervisors to get arrested for his criminal acts?  Sure the supervisors might have some sort of civil liability, but unless they were actually directing the criminal activity, how could they have any criminal liability?

So where am I headed with this rambling Monday morning post?  In the case of the Bernardo Barrera mortgage fraud, the attorney whose office conducted the closing for the sale of the Oak Avenue home from John Arthur Romney to Bernardo Barrera was arrested and according to prosecutor Kostrzewski was part of an "organized scheme to defraud".  For the last two years both Detective Baluja and Prosecutor Kostrzewski have beat the following statement into our heads...

"She's guilty of mortgage fraud because she didn't follow closing instructions"

Again and again throughout the arrest affidavit, depositions and hearings we hear that "didn't follow closing instructions" line over and over.  Some of our readers have mentioned that not following closing instructions may not rise to the level of criminality, I don't know the law well enough to judge, but if indeed it doesn't rise to the level of criminality, then how could they have arrested the attorney?  According to Detective Baluja and Prosecutor Kostrzewski the attorney was guilty because she conducted the closing and in the course of doing so didn't follow the closing instructions set forth in the lenders closing instructions.  Now, for those of you who are somewhat familiar with closings and the procedures involved with such a transaction, you should recognize the document that's usually at the end of every closing package, it's called the "acknowledgment of closing instructions by the closing agent".  Essentially when the closing agent signs this document they attest that the closing has been done the way the lender outlined in their instructions.  Detective Baluja and Prosecutor Kostrzewski, it would only make sense that since you arrested the attorney for "not following closing instructions" that her signature would have been on this acknowledgment right?  Here's the document...

I've redacted the name of the person who actually signed the acknowledgment, but rest assured the person who signed wasn't arrested.  In fact months after the arrests were made Prosecutor Kostrzewski denied that such a document actually existed, even worse, the person who executed this critical document wasn't even questioned before the arrests were made.  Does that make any sense to anyone?  I'd be willing to bet that neither Detective Baluja or prosecutor Kostrzewski had ever seen this document before even though it's in their own case file... 

More delays and one hell of a deal on a $600,000 home!

We mentioned yesterday that the defendants in the Bernardo Barrera mortgage fraud case each had court appearances scheduled.  After nearly two years of waiting with bated breath for something meaningful to happen at one of these hearings, we've learned not to expect anything, as before all we got were more delays.  No surprises there.


Moving along, we also found out yesterday that the home that was at the center of the $600,000 mortgage fraud that John Arthur Romney orchestrated was sold at auction for $40,000!  Surprising how a home that Mr. Romney and crew had appraised for $600,000 two years ago has taken a 93% drop in value?!  Naturally the parties that purchased the home at auction are going to resell it, so we took a drive by to see for ourselves...

My, my how times have changed, the new owners are looking to sell it for $68,000.  Seeing the house as it sits today really makes you wonder how anyone could have appraised this home for $600,000.  We'll talk more about the fraud involved in inflating the value a little later.  Be patient.

On another note, while flipping through the channels half asleep last night I came across story whose headline didn't make sense (uh oh), it went something like this...

"...the focus shifted to a mortgage broker. Could his drive to close deals and the pressures of the job lead him to commit a double murder?"

HUH!  Come to find out that police were accusing mortgage broker Ron Santiago of killing two of his clients!  It's an interesting story with some parallels with some of the stories we've been discussing here on our blog, take a look for yourselves and we'll discuss later.

Felony soundings, trial status, etc. WTF?

A quick look at John Arthur Romney's court docket shows that there's a "felony sounding" this morning...

What's a "felony sounding"?  We can't seem to find a definition online, any ideas?  Also, codefendant Delaila Estefano's docket also shows some activity this morning as well...

This docket shows a status hearing, is that any different than a felony sounding?  Who knows.  We'll poke around a bit and maybe find out what happened at these hearings and update a little later in the day.  In the mean time, take a look at this instance of another individual who's a bit frustrated with the judicial system and how he takes out his frustration on a "rat"...

How to interview a key witness according to Detective Jorge Baluja.

Say you're going to interview a key witness in the Bernardo Barrera mortgage fraud case, how would you go about doing it, especially considering that your entire case is based on the testimony that this witness allegedly gave?  Let's think for a moment, you would think that you'd want to make the witness feel calm and at ease, you certainly wouldn't want the witness to feel threatened.  On the contrary, the more relaxed the witness is, the more likely they are to tell you what you want, right?  Although that approach would make sense to a person with a modicum of sense, let's not forget that we're dealing with MDPD's pride and joy, Detective Jorge Baluja.  We've seen several instances over the past year of Detective Baluja coercing witnesses and  instructing witnesses to lie, so is there any doubt that he screwed up this witness interview?

Like we said before, wouldn't you want to make the witness feel comfortable in order to gain their trust?  Let's see how Jorge achieves that trust, from the witness's deposition transcript...

There you go!  What better way to make a witness feel right at home than reading them their Miranda Rights!  Remember, we're not cops nor do we have any policing experience, this could be a standard run of the mill procedure for interviewing a witness (we doubt it), it just seems a bit odd to mirandize a witness that you're trying to elicit favorable testimony out of!  You would think that this would be a great time to tell the good detective to go fcuk himself and call an attorney.  Regardless, nothing has made sense from the inception of this case so there's no reason for anything to make sense now.

Moving right along, now that the witness has been mirandized, what does Detective Baluja do next?  Remember, it's our contention that as a detective you'd want to develop a repertoire with the witness, make them feel at ease so they can tell you everything they know about the crime being investigated, let's take a look at what the good detective does next...

FANTASTIC!  What better way to make the witness feel comfortable than to let them know that you're investigating them!  Hey there witness, I've already looked through your bank records, I've got photo's of you and your husband, run criminal background checks on you and your family and conducted surveillance on you and know what you do with your time, now would you like to answer some questions for me regarding a real estate transaction you were involved in?  Now, if the detective reading you your miranda rights wasn't enough to get you to stop the conversation and call your attorney, this certainly should be!  

Now, you've been mirandized and have now been told that the detective has turned your life upside down and has actually been following you around, assuming you haven't called your attorney by now, what are you going to do?  If you're a young woman that's never been questioned by a cop, especially the way Detective Baluja has handled himself, one can only assume that your going to do everything you can to save your ass, let's see what the witness says...

There you have it.  The witness was going to make sure she wasn't going to be charged with anything.  With the witness now backed into a corner, what good is anything they say?  If indeed the sole objective is "to make sure you were not going to be charged", then what are the chances of getting accurate testimony from the witness?  I for one would say whatever the hell the detective wanted just so I could get the fcuk out of there!

As expected, the testimony that Detective Baluja elicited from this witness is full of problems, big problems.  Did you guys expect any less?

I reckon we got fraud, UH HUH!

Somehow I found myself switching between watching Slingblade on cable last night and reading Detective Jorge Baluja's deposition transcripts from the Bernardo Barrera mortgage fraud case.  Strange combination, as the night wore on the line between the movie and the transcripts started to get blurry until they became one and the same.  From the depo...

Can you picture it?  In case you can't, here's a visual aid...

Back to the depo...

Easy enough right?  Let's try again...

AGAIN?!

JEEZE!  Detective Baluja goes on to say...

You sure about that Jorge?  I mean, you would have to be absolutely positively certain that the facts were as you stated before making the arrests right?  You're suggesting that the attorney fraudulently represented to Citi Mortgage that the earnest money was already received before the closing took place?  Go back and check your file or even better, go sit down with ASA Bill Kostrzewski and have him read it to you.  If you still don't get it, don't worry, I'm going to make sure you understand before I'm done.


It's obvious after following our blog over the last year that investigating mortgage fraud was above Detective Baluja and ASA Kostrzewski's pay grade.  After going through the case files again and again, you almost feel bad for these two, if only investigating these cases was as easy as what you see on TV...

Stay tuned folks, things are about to get much, much more interesting...

An admission of guilt from one of the defendants involved in the Bernardo Barrera mortgage fraud case and an unintelligible riddle courtesy of Assistant State Attorney Bill Kostrzewski.

Just when you think there's nothing else to write about regarding Detective Baluja and ASA Bill Kostrzewski's handling of the Bernardo Barrera mortgage fraud case, somehow something else always pops up.  It's amazing, every time we go through the Bernardo Barrera mortgage fraud case file we find more to write about.  After rereading the transcript of Detective Baluja's second deposition, we accidentally bumped into the Detective telling the attorneys that one of the mortgage fraudsters basically admitted to his involvement in the fraud!  Take a look for yourselves, from the deposition...

John Arthur Romney Admits That He's Guilty of the Crimes He Was Charged With in the Bernardo Barrera Mortga...


Now this is huge isn't it?  Look again...

So according to Detective Baluja's testimony, Mr. Romney incriminated himself.  Great, let's keep going...

Even worse!  Now Mr. Romney admits to knowing that the sale of the property was a fraud!  It get's worse...

Wonderful, now he admits to knowing that the person appearing at the closing was not Bernardo Barrera?  Let's look at the crimes Mr. Romney was charged with back in October 3, 2008:

1. Organized Scheme to Defraud
2. Grand Theft
3. Identity Theft

If indeed Detective Baluja's recollections are correct and Mr. Romney has spilled the beans regarding his involvement in this fraud, according to what we just read, didn't he just confess to being guilty of all the counts that he was charged with?  The question that begs to be asked then is why is it that twenty months after he was initially charged and at least a year and half after this alleged confession hasn't Mr. Romney been sentenced?  Perhaps it's because of some sort of stellar cooperation that he's been giving the state?  That would be plausible if not for this...

Now, isn't that a problem?  Prosecutor Kosztrewski contends that the attorney was the mastermind of this fraud and that it was the attorney who artificially inflated the value of the home three fold yet here we have the man that made nearly $500,000 from this fraud who's admitted his role in the fraud to the police and he can't implicate the attorney?  WTF?  Perhaps sensing the trouble that this alleged confession creates during the deposition, in an effort to save his sinking ship, Assistant State Attorney Kostrzewski presents the witness and the defense attorneys with this riddle...

Billl Kostrzewski Telling Us a Riddle

We've spent nearly a day trying to figure that one out, perhaps it's some sort of code or language that only seasoned veteran economic crimes prosecutors understand?  

The real question that we're left with here today is why the hell isn't John Arthur Romney behind bars?  Nearly two years after he was charged, he's still out on the street, even after his admission of guilt on just about all the crimes he was charged with?  If indeed Detective Baluja's recollection is correct and Mr. Romney did admit to his involvement in the fraud, why would you need to cut a deal with him?  Doesn't this alleged confession make the rumors of Mr. Kostrzewski cutting a deal and giving Mr. Romney probation even more egregious?