2012 starts off well for Veldora Arthur and once again, the tax payers get screwed!

As most of you already know, convicted fraudster and ex City of Miami assistant fire chief Veldora Arthur got to keep her pension.  We sat through an hour long hearing last week at the City of Miami Fire Fighter and Police Officer Retirement Trust, let's just say that the hearing was a farce.  Our sources tell us that there was a bunch of back room dealing that went on before the hearing virtually guaranteeing that Veldora got to keep her pension despite the crimes that she committed while on the job, we'll cover that in detail later this week, in the mean time, check out our friend Melissa Sanchez's coverage of the hearing at the from the Miami Herald here.


While I expected Ms. Arthur to get to keep her pension, what I didn't expect was this...

Veldora Arthur Restitution Order

That's right, in case you missed it, here's the part that left me FLOORED!

What was that?

HUH?

That's the icing on the cake, isn't it?  It's bad enough that Ms. Arthur got to collect her full pay and benefits while sitting at home awaiting trial, now she's sitting in prison STILL COLLECTING HER $167,000 PENSION and as a parting gift, the federal government has decided that despite the fact she cost the banks millions of dollars worth of losses as a result of her nefarious schemes, she now doesn't have to repay them a single red cent!


So there you have it, the tax payer takes it up the ass not once, but TWICE!  We'll done!

What happened in the Veldora Arthur federal mortgage fraud case in her own words. And guess who's suing J.P. Morgan Chase for FRAUD?!

We're fortunate enough to get a rare glimpse into what exactly happened in the City of Miami Assistant Fire Chief Veldora Arthur's federal mortgage fraud case, that is what happened according to Veldora herself as she explained it to the FBI.  Here's a transcript of what she told the FBI and the AUSA during her interview on August 5, 2010...

FBI Interview of Veldora Arthur

We'll go through it in detail on Monday, but till then, has anyone guessed who's suing J.P. Morgan Chase for fraud?  I'll give you a hint...

You got it, just days after she was thrown in Federal Prison for all sorts of fraud, lawyers on behalf of Veldora ACTUALLY SUED J.P. Morgan Chase for fraud on her behalf!

LOL!  We're digging up the complaint now, we'll discuss on Monday.  Have a nice weekend!

Meanwhile back at the Herald...

While we were rather impressed with ourselves for being mentioned the other day in the Miami Herald regarding our coverage of the Veldora Arthur mortgage fraud trial, we actually missed the Herald's first attempt at covering the verdict last week.  Take a look for yourselves at the story that was buried in the business section, as always click on the image to enlarge...

Funny how the City of Miami's Assistant Fire Chief gets convicted of several counts of mail and wire fraud yet somehow it doesn't make the headline, instead the story is led off with...

Broward man sentenced in fraud schemes.

Even worse, the Herald's staff writer Toluse Olorunnipa couldn't even figure out where Veldora worked, from the article...

...a former assistant to Miami-Dade’s fire chief was found guilty of taking part in an $11 million mortgage fraud scheme in Aventura...

Oh really?

I could have sworn Veldora was employed by the City of Miami and not Miami-Dade county!

Despite the Herald's failure to put together a proper story, their real failure was highlighted by our friends over at Random Pixels yesterday.  While the Herald has been largely ignoring Veldora's story and has relegated it to the back pages of the paper, the Herald's Spanish sister publication, El Nuevo Herald, deems Veldora's mortgage fraud capers to be front page news...

From the El Nuevo Herald article (with translation thanks to Random Pixels via google translate)...

by Melissa Sanchez
El Nuevo Herald

Veldora Arthur, the Deputy Chief of the Miami Fire Department, convicted Friday of mortgage fraud, will be eligible to continue receiving almost $167,000 in annual pension while jailed.

Robert Nagle, manager of the Retirement Fund for the Fire and Police of Miami, said a lawyer for the Fund is reviewing the federal case against Arthur to determine whether the crime in her capacity as deputy chief - for example, in uniform or during hours.

"Committing a felony could cause a recipient of a pension to lose [his/her] pension, but the crime must have been connected to his position," said Nagle. "If it was something they did in their private time, then they keep their pension."

Amazing how the Herald won't cover sensitive City of Miami related matters and how us non Spanish speaking readers have to look to the Spanish version of the Herald to find out WTF is going on!  Regardless, we're still looking into documents regarding Veldora's crimes in order to determine whether or not she used her official possession at the City (not the county) during the commission of the frauds she was indicted for, we'll update as soon as we find anything new.

What everyone wants to know, was Veldora Arthur committing mortgage fraud while on the job at the City of Miami Fire Department?

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Now that City of Miami Assistant Fire Chief Veldora Arthur has been convicted of several counts of mail and wire fraud, the question that everyone seems to be asking is whether or not she's going to keep her City of Miami FD pension.  The litmus test seems to be whether or not she committed the crimes while on the job at the fire department, from our comments sections yesterday...

It's gonna have to be proven that she used her official position to commit the felony.

Understood, so how can we prove that she used her official position to commit the crimes she was indicted for?  Once again from our comments section...

There was a rumor that she used her City fax or email to transmit some of the fraudulent communications. Can you look into that?

Of course we can!  Without having the entire case file at my disposal, this was a bit of a challenge, that is until I found this bit of information regarding a dispute Veldora had during the purchase of another home unrelated to the indictment where her primary residence was called into question.  Take a look at this excerpt...

It bears mentioning that after the purchase of Unit 3711, Loan City, the lender, conducted a review of the documents submitted in support of the loan for Unit 3711 and came to the conclusion that the defendant had misrepresented, among other things, her occupancy of the property as her primary residence. Loan City sought indemnification from WCS Lending who processed and collected the information on behalf of Loan City. In connection with that dispute, the defendant on June 27, 2006 wrote a letter that was faxed that same day from the City of Miami Fire Department wherein she stated as follows: “In regards to the statement regarding my residency, I have never stated to any official at Loan City or any other agency that I don’t reside at 3370 Hidden Bay Drive, Unit 3711. That statement is totally false as I have been residing there since I purchased the unit.”

In this instance, Veldora was purchasing a home on the west coast and inadvertently listed her primary residence as her home in Weston, when the mortgage broker who was reviewing the loan package for the home on the west coast that they had just lent her the money on, they spotted the Hidden Bay drive unit on her credit report (which was one of the homes that were part of the federal indictment) and realized that she had submitted conflicting statements about where her primary residence was.  In an effort to cover her tracks, Veldora wrote a letter to the lender where she stated...

“In regards to the statement regarding my residency, I have never stated to any official at Loan City or any other agency that I don’t reside at 3370 Hidden Bay Drive, Unit 3711. That statement is totally false as I have been residing there since I purchased the unit.”

Unfortunately Veldora sent this bogus letter while on the job at the City of Miami Fire Department...

"the defendant on June 27, 2006 wrote a letter that was faxed that same day from the City of Miami Fire Department"

While this is the only evidence we've been able to find of Veldora using her position at the FD to commit the frauds she was ultimately convicted of, we're told that there were several other instances where she used her time on the job to further her criminal activities.  The question that remains is whether or not this is enough to get her pension taken away from her.  We'll keep looking for a definitive answer and report back.

Update on the Veldora Arthur mortgage fraud case.

Looks like the United States Attorney's Office issued a press release regarding the outcome of the Veldora Arthur, Neil Fagan and Pamela Johnson mortgage fraud trial late Friday afternoon.  Here it is in it's entirety...

JURY FINDS MORTGAGE FRAUD DEFENDANTS GUILTY OF ALL COUNTS IN MORTGAGE FRAUD SCHEME INVOLVING THE HIDDEN BAY CONDOMINIUM COMPLEX IN AVENTURA, FLORIDA

September 30, 2011
FOR IMMEDIATE RELEASE

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced that a federal jury found defendants Neil Fagan, Pamela Johnson, and Veldora Arthur guilty of conspiracy to commit wire and mail fraud, and all substantive mail-fraud counts set forth in the February 3, 2011 superseding indictment. The indictment included charges of conspiracy to commit wire and mail fraud and substantive mail fraud. The conspiracy and mail fraud counts carry a statutory maximum sentence of 20 years’ imprisonment. All defendants were remanded into the custody of the United States Bureau of Prisons following their convictions.

Fagan and Johnson were charged in Counts 1 through 5 of the indictment and were convicted on all counts. According to the evidence, Fagan recruited the straw buyers who bought the properties listed in the indictment and received approximately $1,300,000 in mortgage fraud proceeds. Johnson served as the settlement agent who handled the real estate closings and diverted fraud proceeds to herself and family members. Arthur, charged and convicted of Counts 1, 3, and 5, was an Executive Assistant to the Fire Chief in the City of Miami Fire Department who served as a straw buyer. Arthur received approximately $317,000 in fraud proceeds in less than a month.

The properties in the case were located at 3370 NE 190 Street in Aventura, Florida, which is known as the Hidden Bay Condominium Complex. During the course of the conspiracy approximately $11,000,000 in fraudulent loans were issued, resulting in a loss to lenders of approximately $7,000,000.

Sentencing for Johnson and Fagan has been scheduled for December 15, 2011at 8:30am. Sentencing for Arthur has been scheduled for December 16, 2011 at 8:30 am.

Mr. Ferrer commended the investigative efforts of the FBI. The case was prosecuted by Assistant U.S. Attorneys Armando Rosquete and Sean McLaughlin.

I missed a crucial part of the press release after a quick glance, earlier today our friend Bill Cooke from Random Pixels highlighted what we missed... 

All defendants were remanded into the custody of the United States Bureau of Prisons following their convictions.

HOLY SHIT!  How the hell did I miss that?  Veldora and company were thrown in jail right after the verdict came down?  Lo and behold, Veldora and her codefendants are actually sitting in the federal detention center in downtown Miami!  For the foreseeable future Ms. Arthur is going to be known as federal inmate #96343-004 and will be calling a cell much like this one in the Miami FDC home...

This really caught me off guard since most defendants that I've known of are allowed to stay out on bail while they're awaiting sentencing, I'm amazed that they took her into custody right after the verdict.  Regardless of what Veldora may have done, I can't begin to imagine how hard this must be for herself and her family, first the indictment and now the incredible fall from being the City of Miami's first black female firefighter and assistant fire chief to now simply being a convicted felon sitting in jail possibly for the next twenty years.

BREAKING NEWS!!! Veldora Arthur found GUILTY!

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This just in, it's confirmed, city of Miami assistant fire chief Veldora Arthur and her codefendants were all FOUND GUILTY on all counts in their federal mortgage fraud trial!  Here are the verdicts...

Veldora Arthur Federal Mortgage Fraud Trial Verdict

Pamela Johnson Federal Mortgage Fraud Trial Verdict

Neil Fagan Federal Mortgage Fraud Trial Verdict

To put it lightly, the defense team failed miserably.  Detail coming up a little later this evening.

Taking a closer look a City of Miami Assistant Fire Chief Veldora Arthur's alleged mortgage fraud misdeeds.

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It looks like the Miami Herald finally got around to reporting on City of Miami Assistant Fire Chief Veldora Arthur's federal mortgage fraud indictment.  From the Herald article...

The indictment says Arthur received a payoff yet had no intention of living on the properties, which eventually went into foreclosure.

Ok, textbook definition of a "Straw Buyer".

Arthur’s attorneys dispute the charges, saying their client actually went to the feds not long after the 2006 purchases took place, and after a friend noticed the paperwork said she was making $123,000 a month, not a year.
Bieber called his client “a victim” who “unfortunately associated herself with people who were committing fraud.”

Victim?  Really?  She had no idea what was going on?

Bieber said that even though Arthur was able to purchase the properties with no money down — a move he said was fairly common during the boom years of the real estate market — she received a payment after the properties closed. 

Hold up, her attorney is admitting that she received payment once the properties closed?  That in of itself isn't proof that somethings wrong?  Isn't the seller supposed to get paid once the property sells rather than the buyer?

Bieber said Arthur was introduced to Fagan through a friend, and was simply looking to make an investment. The plan was to flip the properties for a profit, but, Bieber said, there was no profit because the properties went into foreclosure.
“She believed this was an honest investment during the real estate boom,” said Bieber.

Wait a minute, the attorney is now claiming that Ms Arthur was "was simply looking to make an investment", just a few moments ago he clearly stated that his client was able "to purchase the properties with no money down" and "received a payment after the properties closed".  Once again, isn't this the textbook definition of a "Straw Buyer"?

After examining the indictment a little closer, we've found that all the homes that were used in this mortgage fraud scheme were in the same building located at 3370 NE 190th street in Aventura.  

From the looks of it, the people who orchestrated this scheme found a sweet spot in this condo, units that would appraise high but for one reason or another were having trouble selling on the legitimate real estate market, no different than the sweet spot that John Romney and crew found in the West Grove where they were able to bust out several homes raking in millions of dollars in profits.

Now, let's take apart this mess and see what we can find.  We'll begin with the deeds for the two condos that Veldora purchased, first unit 3111...

veldora arthur warranty deed for 3370 NE 190th street unit 3111 aventura flo 33180

From the documentary stamps we figure the purchase price of this property to be $1,950,000.  That's seems like a ton of money for a 2,720 sqft condo!  Regardless, let's take a look at the warranty deed for unit 3711 in the same building...

veldora arthur warranty deed for 3370 NE 190th street unit 3711 aventura flo 33180

DAMN!  Based on the doc stamps that unit was purchased for a cool two million dollars, same unit as 3111 just six floors higher.

Now, let's look at the mortgages for Unit 3111 begining with the first mortgage for $1,462,500...

veldora arthur first mortgage for 3370 NE 190th street unit 3111 aventura flo 33180

And now the second mortgage for $349,050 on the same property...

veldora arthur second mortgage for 3370 NE 190th street unit 3111 aventura flo 33180

Now, let's move on to the second condo, unit 3711.  Here's the first mortgage for $1,365,000...

veldora arthur first mortgage for 3370 NE 190th street unit 3711 aventura flo 33180

And the second mortgage for $292,500 on the same unit...

veldora arthur second mortgage for 3370 NE 190th street unit 3711 aventura flo 33180

So far so good, let's summarize...

• Unit 3711 purchased on February 7, 2007 for $2,000,000 financed by two mortgages totaling $1,657,500
• Unit 3111 purchased on March 6, 2006 for $1,950,000 financed by two mortgages totaling $1,811,550.

Based on the purchases prices we were able to deduce that means there was a shortage of $480,950 between the two transactions, Ms. Arthur's attorney stated that she put no money down, so who did then?  To further complicate matters, Ms. Arthur turns around a refinances unit 3711 just five months later for a cool $1,680,000...

veldora arthur third mortgage for 3370 NE 190th street unit 3711 aventura flo 33180

Can you imagine the kind of money the mortgage brokers and title companies must have made off of these transactions?!  We're talking over FIVE MILLION DOLLARS worth of loans not to mention the recording and closing costs!  Yet even after signing what looks like hundreds of pages of documents for these purchases and the subsequent mortgages Ms. Arthur's attorney still claims that...

“She believed this was an honest investment during the real estate boom,”

Let's give her the benefit of the doubt, after all our justice system is based on a presumption of innocence for those who've been charged with a crime.  I'm baffled at the thought that Ms. Arthur, someone whose job at the fire department calls for managing payrolls and procurements, someone that is supposed to have a modicum of financial sense could have thought that this was a good or even honest investment?  The mortgage payments alone for these two properties must have been in the tens of thousands, after all she was borrowing nearly four million dollars at 7 to 8% interest!!  That hardly sound like something someone that has any financial sense would agree to especially when interest rates were as low as they were during the peak of the housing bubble.  Let's not forget qualifying for the mortgages themselves, how the hell did a City of Miami firefighter making $180k per year qualify for four different mortgages for close to four million with within one month of each other?

Something is definitely haywire with the statements that Ms. Arthur's attorneys made to the media today but like I said, she's innocent till proven guilty and should be treated as such.  Let's assume that she had no part in falsifying the documents used to obtain these mortgages, let's even assume that she wasn't really a straw buyer and didn't even get cash back after these transactions closed.  Let's say all of those defenses are legitimate, there is one aspect of these transactions that she's not going to be able to explain away though, has anyone figured it out?  

We'll discuss tomorrow, in the mean time think about this question, what do Veldora Arthur, Commissioner Marc Sarnoff and the Plantation cops that were indicted for mortgage fraud all have in common?

City of Miami Assistant Fire Chief Veldora Arthur federally indicted for mortage fraud.

Here's the indictment...

veldora arthur indictment

Consider for a moment who Ms. Arthur is within the City of Miami Fire Department, oddly enough her responsibility is to oversee the financial matters of the Fire Department including payroll and procurement.  Who exactly do we have behind the controls at the City of Miami?  Ms. Arthur makes $184,336.44 as an assistant fire chief, in this day and age, is that not enough to get by on?


What's even more disturbing is the fact that she was arrested ten days ago on an indictment from late 2010, yet we haven't even heard a peep out of the local media.  What happened to the perp walk or the press release?  Ms. Arthur and crew were charged with a nearly $11,000,000 mortgage fraud scam and the media is mute?  What gives here folks?


Ms. Arthur is out on $125,000 bond, we'll have a full break down of the indictment coming on Wednesday, stay tuned.