If you have an hour to kill, listen to this story of our criminal court system gone nuts.

As if the cases that we've written about aren't bad enough, take a listen to this...

More revelations about a former street gang member and cooperating witness from the Plantation Cops mortgage fraud trial...

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The Plantation cops federal mortgage fraud trial is getting really interesting, yesterday we learned some really interesting background on one of the defendants charged who has cut a deal and is cooperating with the government.  Here's what our courtroom observer reports to us regarding mortgage broker Rene Rodriguez Jr's checkered past...

Rene was in a gang called circle of sharks he sold cocaine to an undercover officer in Ft Lauderdale.  He witness a stabbing and arson and testified against his fellow gang memebers.  He was arrested for beating up his wife (something him and the case agent share in common), each and every time he made a deal and because his dad was a fed, he made deals with feds and walked each time in this case his dad knew the lead agents boss  fdle SAIC Vic Johnson .

NICE!  So one of the governments key witnesses against the other defendants is a former drug dealing, wife beating gang member.  Funny how the real estate and mortgage business attracted the cream of the crop back during the boom years!!  Now check this comment from Wednesday's post...

Did anybody read the other posts where it says that shrunk down files were presented at the closing.first off you people need to use your own brain,If joe was the brains of the operation why would he let gulla and rodriguez take 3%,and make more money than him.that doesnt sound like the mastermind to me, that sounds more like he was a SUCKER!!!!! Just ask yourself 1 question Why would the mastermind make less money and take more risk??? ANSWER IS a mastermind wouldnt, a PATSY would!!!!!! Also why dont you check rene rodriguez's past. He's a former member of the sharks,a violent gang of older steroid using troublemakers. He got out of that trouble by doing what he's doing now. He's a professional RAT!!!!! He points his finger at other people when the finger should be pointed at him. Why is it so hard to believe that a career criminal might be lying and that a former police officer might be telling the truth! Maybe the BAD people in this are THE BAD PEOPLE!!!!!!! Just in case you need to be hit between the eyes... Matt Gulla & Rene Rodriguez are the BAD PEOPLE!!!

March 30, 2011 8:53 PM

Once again, as the trial progresses it seems like our readers are right on the money.  Back to our courtroom observer...

Yesterday the whole case was hi I'm Rene Rodriguez Joe Guaracino told me to do it.  Which obviously was well coached by the defense.   Today they asked when you were commuting hundreds of frauds in 99-03 before you met Joe who was telling you then.  It was kind of funny.  He admitted today by name that many of the lenders reps.   Were also in on it they knew it and assisted him.  He also stated all of the brokers at family lending group and the lending house and security mortgage where he worked have been committing the same frauds since 99'.  He went on to say yesterday only on joes loans. Today he was asked did you tell the government you made 150k on all your frauds in 06 he said yes then the defense team showed him his deposits into his bank account of close to 1 million for the year, so he was asked did the government know this he said they didn't ask.  So the defense went on to say, So joes deals were only 10% of the business.  He agreed! 

If true, this testimony creates a completely different scenario than what we were presented with before.  Before Mr. Rodriguez took the stand we were led to believe that Joe Guaracino was the ring leader and the rest were his minions who followed his every order.  Based on yesterdays testimony it seems like the mastermind was Mr. Rodriguez and Guaracino and the cop's business was only a small fraction of his overall mortgage fraud business.  

 

I'm not exactly sure what effect this testimony is going to have on the jury, if nothing else the defense team have done one hell of a job destroying every witness that the government has put on the stand.  I can tell you this much, at least in my opinion I'm finding that the real criminals here are the government witnesses not the people that are on trial.

What the hell is wrong with the reporters over at the Miami Herald?

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You all know we've had our issues with the Miami Herald in the past (check here, here, here, here and here, not to mention the Herald's censoring of comments on high profile articles) so it comes to no surprise to me that the defense attorneys representing the Plantation cops in the federal mortgage fraud trial have had issues with the way the Herald has been reporting on the case and the subsequent trial.  Throughout the last two years since the inception of this blog, I've discovered that the Herald seems to have a pro state and pro prosecution bias to all their reporting, time and time again I've seen the Herald prosecute people in the paper before they even have a chance to go to trial, presumption of innocence be damned. 


We left off yesterday quoting the Herald's James H. Burnett article on the Plantation Cops federal mortgage fraud trial, apparently there were some gross errors made in Mr. Burnett's story.  From one of the courtroom observers...

Miami herald is retracting there inaccurate post after a call to editor and copy if transcript not even close about Velez or Joe.  Very poor reporting, they took Renes testimony of what he did and assigned it to Joe and Velez.

No kidding?  I'm told that the reporter got the story so screwed up that some of the defense attorneys actually called the editor and asked them to retract the story.  I'm not sure how much good that will do at this point.  The observer goes on to say...

Rene stated he told Joe that VOE (verification of employment) with BoA (Bank of America) were the easiest they (Burnett) wrote that opposite.  He (Rene) also admitted to forging over 960 documents they said Velez did that!  This idiot reporter James (Burnett) walks out as soon as the defense starts to cross, not interested in both sides...

I could understand the reporter making some mistakes and mixing up names but why is he only listening to the prosecutors side of the case and walking out when the defenses turn comes to cross examine the witnesses?  Could you possibly get more biased than that?  Is it just me or does it seem like the Herald has a vested interest in making these guys look as guilty as possible?

Plantation cops federal mortgage fraud trial in the news!

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The article in yesterday's Miami Herald regarding the Plantation Cops mortgage fraud trial basically reaffirms everything our readers and commentors have been telling us over the last few weeks.  In a nutshell, things aren't going that well for the feds...

The key witness in a federal mortgage fraud trial involving several law enforcement officers took the stand Tuesday and implicated himself in a scheme that brought the group millions.
After weeks of testimony in a Fort Lauderdale federal court, Rene Rodriguez admitted he was a prolific forgerer, signing other people’s signatures to mortgage, refinancing applications, falsifying job titles and incomes to make alleged clients eligible for better loan terms, and even inventing non-existent tenants in their rental properties, so as to suggest they had more income than they did.
But, Rodriguez insisted, he did it all on behalf of five cops, an FBI agent, and their alleged ringleader , former Plantation cop Joseph Guaracino who will go on trial in this case, later this year for his role in the case.
The defendants are: Lauderhill officer Joseph LeGrasta, FBI special agent Robert DePriest and four Plantation current or former police officers - John Velez, Daryl Radziwon, Casey Mittauer, and Joseph DeRosa.
All were indicted last summer on conspiracy charges that allege they were willing participants in Rodriguez’s and former business partner Matt Gulla’s fraudulent business deals that secured the duo $16.5 million in loans on 68 investment properties that the officers bought to flip.
Gulla, who has also accepted a plea agreement with hopes of a lesser prison sentence, testified for the prosecution several weeks ago.
The law enforcement officers’ defense so far has been that they were snookered by real estate pros and had no idea that Velez was signing their names to false documents.
Velez, who admits forging pieces of as many as 1,000 documents, already has plead guilty to two criminal counts - wire fraud and conspiracy - in the hope that he will draw a lighter sentence.
Rodriguez’s Tuesday testimony produced two surprises.
He acknowledged he never got direct orders from the defendants to commit fraud. Those orders came from Guaracino, the alleged ringleader. Guaracino told him the defendants were all “on board,” he said.
Rodriguez also insisted that he never signed the “final” signatures on any of the questionable mortgage applications. That signature, he said, was always signed by one of the defendants – implying that they saw the fraudulent information.
Rodriguez testified that he and Velez wrote on loan applications that Velez was a “detective,” and later giving him an apparently non-existent title of “Lieutenant Detective,” to make loan officers think Velez had a high-ranking job to justify the $12,000-plus-per-month income that was listed.
Rodriguez claimed Guaracino taught him that it was easier to fool Bank of America on loan applications, because information could be cut and pasted into loan documents, and the bank would not challenge them. Rodriguez also testified that his account executive at now defunct Tuscon-based First Magnus told him not to worry about lenders checking to verify income or other personal information on loan applications Rodriguez submitted.
The government gave John Velez’ ex-wife, Tara Velez, immunity for her testimony. However, she appeared reluctant to provide information.
Frequently near tears, she repeatedly said “I don’t recall” for hours as lead prosecutor Michael Sullivan asked if she remembered signing mortgage applications and related documents.
Frequently near tears, she did insisted “I don’t recall,” when asked But while Velez didn’t budge on her lack of memory on signing the documents,
In many instances, she answered “It appears to be” when Sullivan asked her if certain signatures on the documents were hers or John Velez’s.
Velez also acknowledged that income levels listed for her and John Velez on a number of documents were not accurate.

By now I think we all get it.  The cops involved trusted the attorneys and mortgage brokers that they were dealing with and had no idea that they were doctoring the loan applications, tenant leases and had no knowledge that their incomes were being overstated in order for them to qualify for the loans.  Got it.  I also understand that the cops themselves weren't making the bulk of the money from these transactions, instead from what I'm told it was the brokers that were making the bulk of the profits from these deals, as I understand it, the cops end of the profits were to be paid when the homes were eventually resold. I get that as well.  

I'm left with one question that I can't get around, let's assume that everything that we've been told is true, brokers forging loan applications, brokers forging leases, brokers faking proof of income, etc.  Anyone that's ever purchased a home knows that at closing the final loan documents include an unsigned copy of the 1003 loan application.  One of the many things that you're required to do at closing is sign those loan docs and reaffirm that everything that's included is correct and that nothing has changed regarding your finances and your ability to repay the loan since you submitted the original loan application.  Now, I understand that all the documents preceding the loan documents at closing were of dubious origin but when the borrowers sat down at closing and signed the docs and the final 1003 loan application, they essentially adopted all the information contained in the forged documents and reaffirmed that everything was correct when they signed.  I can't figure out how the defense attorneys are going to get around this problem at trial and considering what we saw in yesterday's post, this could be a major stumbling block for the defense.


Any thoughts?

Man gets sentenced to 21 months in federal prison for lying on a mortgage application!

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WTF!  Take a deep breath and read Joe Nocera's excellent article from last Friday's New York Times regarding the federal mortgage fraud conviction of Charlie Engle.  From the article...

Was Mr. Engle convicted of running a crooked subprime company? Was he a mortgage broker who trafficked in predatory loans? A Wall Street huckster who sold toxic assets?
No. Charlie Engle wasn’t a seller of bad mortgages. He was a borrower. And the “mortgage fraud” for which he was prosecuted was something that literally millions of Americans did during the subprime bubble. Supposedly, he lied on two liar loans. 

“I had a couple of good liar loans out there, you know, which my mortgage broker didn’t mind writing down, you know, that I was making four hundred thousand grand a year when he knew I wasn’t.”  

So this guy gets prosecuted for lying on his loan applications?  Even worse...

The monthly income listed on the second loan was $32,500, an obviously absurd amount...


Mr. Engle claims that he never saw that $32,500 claim and never signed the papers. Indeed, a handwriting analysis conducted by the government raised the distinct possibility that Mr. Engle’s signature and his initials in several places in the mortgage documents had been forged.

No shit?  Didn't the mortgage brokers in the Plantation cops federal mortgage fraud case do the same thing?

As it happens, Mr. Engle’s broker for that loan, John J. Hellman, recently pleaded guilty to mortgage fraud for playing fast and loose with a number of mortgage applications. Mr. Hellman testified in court that Mr. Engle had signed the mortgage application. Early this week, Mr. Hellman received a reduced sentence of 10 months, less than half of Mr. Engle’s sentence, in no small part because of his willingness to testify against Mr. Engle. 

SHAZAM!  The mortgage broker gets off for selling his client out even though he's the one who forged the documents that got his client into this mess!!  What's even more disturbing is how the case came to be, an IRS agent saw a documentary about Mr. Engle running across the Sahara desert...

“Being the special agent that I am, I was wondering, how does a guy train for this because most people have to work from nine to five and it’s very difficult to train for this part-time.”

Is this the way a government agent thinks?  I'd be more interested in watching the movie and figuring out how someone could run across a desert rather than trying to figure out the finances of the guy who's running!  Special Agent Robert W. Nordlander also says...

"...that sometimes, when he sees somebody driving a Ferrari, he’ll check to see if they make enough money to afford it."

WOW!  Then worse, when Agent Nordlander isn't busy trying to find his next suspect while watching a documentary, he's busy digging through peoples trash!

Still convinced that Mr. Engle must be hiding income, Mr. Nordlander did undercover surveillance and took “Dumpster dives” into Mr. Engle’s garbage. He mainly discovered that Mr. Engle lived modestly.

This story has left me completely floored.  Things must be real slow for Special Agent Nordlander up in the eastern district of Virginia for him to resort to this kind of bogus prosecution.  I have to wonder though, what would happen if Special Agent Nordlander came down to Miami for a visit?  What would he think of our city's chief financial officer, Larry Spring, who lied about his primary residence on his loan apps when he mortgaged his mother's house and defrauded the lender out of hundreds of thousands of dollars?  Or even better, what would Special Agent Nordlander think of our esteemed City of Miami Commissioner, Marc Sarnoff, who also managed to lie about where he was living to his lenders in order to enjoy lower interest rates?  Do you think Special Agent Nordlander would buy Mr. Sarnoff's explanation?

"I don't know anyone who's ever read their mortgage!"

Somehow I doubt he'd buy that.  I'm more inclined to believe that the special agent would first ask why these people haven't been prosecuted for committing crimes as bad if not worse than Charlie Engle and then I'd bet he'd ask the same question we've all been asking lately...

WHY THE HELL DO THESE PEOPLE STILL HAVE THEIR JOBS!

Despite everything Mr. Engle has gone through and the fact that he's serving time in a federal prison, he still manages somehow to write a blog about his experience.  Good luck to Mr. Engle, I hope his 21 months go by quickly and painlessly.

 

A message from City of Miami Assistant Fire Chief Veldora Arthur and another update from the Plantation Cops federal mortgage fraud trial.

Here we are at the end of another week, a week where we've tried unsuccessfully to contact City of Miami assistant fire chief Veldora Arthur who's accused of participating in an eleven million dollar mortgage fraud scheme. I've tried to contact the assistant chief both by phone and email, no answer by phone and each time I've emailed her I've gotten this back...

Of course she's out of the office! She's making $300k+ per year, who the hell has time to be sitting in the office? From the looks of these "out of office" responses and the fact that we're told that she's still got her job despite being federally indicted in an eleven million dollar fraud, I think it's time someone takes a look at what's going on with the City of Miami fire department. At the very least in my opinion she should have been suspended immediately pending the outcome of her criminal case considering the nature and the severity of the crimes she's being accused of committing.


Moving on, we've been posting updates from the Plantation Cops federal mortgage fraud trial as they're sent to us by one of our readers who's attending the trial, one of our commenters from yesterday expressed their displeasure about what we were posting. To those of you who don't like our reader's synopsis of what's going on at the trial, please stop reading this post right now and move on to something else. As I stated yesterday, I'm simply reprinting what the courtroom observer has sent me in toto, if you have an issue with how they've interpreted what went on that day in court then I can't help you. I for one am grateful for the insight they've provided, take it for what it's worth. Please forgive the spelling and grammar issues as the updates seem to be coming live via smart phone. With that said, here's another report from the last couple of days at the Plantation cop's federal mortgage fraud trial...

Today Loraine Hart a closer for Turnkey Title admits to signing documents for others out of convenience. She stated that she would knock out a closing in 15 minutes, point and sign. When asked if Joe ever forged or initial for the buyers she said disgusted, never! She stated they were professional investors and this was just the industry's fast pace closings, sign quickly. She testified that many others at the title company would forge and even trace signatures of others on documents like the lenders instructions but attorney kassner for Joe Derosa state the lender wanted this important document signed by the borrower that was the marching orders and you would ignore that an sign on behalf of the buyer? Yes

It appears the defense is job is very simple just ask the Governments witnesses and they tell the truth. Will the government be foolish enough to continue to try the remaining defendants? Or will they put their egos aside? the facts of the case will continue to come out daily in support of the defense. How they can continue in good faith at this point borders on an ethical/bar violation.

I don't necessarily endorse these views but it does seem like the case isn't going well for the government. I would really hate to think that the prosecutors indicted these police officers with anything other than a rock solid case. If the cops and FBI agent that were charged end up being found not guilty, who's going to restore their reputations in the community? Who's going to restore their careers and give them back the last year and half of their lives? We'll have to wait and see how the trial turns out.

An update on the Plantation Cops federal mortgage fraud trail...

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We've been fortunate enough to get some updates on the Plantation Cops mortgage fraud trial, here's a summary of what had gone on as of March 8 from one of our readers who's attending the trial...

Matt Gulla the governments lead witness is on the stand, defense council have a number of issues to impeach him on. The broker admitted to forging all the fraudulent documents, The Governments whole case Relies on the testimony of this broker Explaining that the shrunk down application presented at closing wasn't purposely shrunk to hide anyting.

The attorney crossing Matt Gulla has him admitting to doing hundreds of loans the same way. Also, he has admitted to forging thousands of loan documents in this case alone. Turns out cops were telling the truth. Matt apparently became friends with Joe the leader and learned he had an aggressive personalty, and took advantage of his trust, knowing with encouragement he would invest in more property. Turns out most of the fraud was committed using Gulla high school friends names and companies were used without their knowledge. In fact there is apparently staff at the high school that was screwed by the ex student. Today he admitted to doing this to many members of his own family and friends. He would make money on the back end called ysp average loan he would make 15k. He would do this by up selling the loan if they qualified for 4%. He would sell them a loan at 7%. What a pig, and to his family. He admitted his partner Rene and him would forge all the documents the lender relied on, then at closing the old bait and switch with shrunk down loan apps. He is very slick even after pleading guilty he acts slick on the stand. But some of the defense lawyers have caught him up. I really didn't think these cops and FBI agent would do this especially considering they still live in the property's and pay the mortgages. The only thing the Govt. has in this case is Matt Gulla their lead witness being impeached daily, and Rene who destroyed documents. In an evidentiary hearing The Judge has stated the Govt. acted with gross negligence and careless in handling this case and the witness when ordered to produce the hundreds of loans this was done on. Rene in 2010 Destroyed documents and the lending groups server! To avoid prosecution of other loans. These cops and all involved are victims of the lenders predatory practices and the brokers were agents of the banks.

And another summary as of March 21...

The bankers the government put on trying to elicit testimony that would support there theory has failed. One of the key theories was the cops agreed to buy these homes owner occupied to get a better interest rate. However what came out from a rep from homecomings/ GMAC was the only people who benefit from this was the broker by getting a higher YSP. And the bank by being able to sell owner occupied property's at a much higher rate to the secondary market.

The gov. calls tenants and they all say, the landlords were great guys always willing to help and did all repairs without incident.

The governments initial theory was the cops did owner occupied for better rate turns out they all qualified for prime loans at low rates 4-5% but the brokers put them in 7-9% rates to make high YSP. There case continues to fall apart daily . Rene (Rodriguez) goes on Wednesday that should be very interesting. He's there last main witness. The case has blown up on the gov. And the truth has come out over and over. The gov. Witnesses are proving the defenses case!

I'm especially disturbed by this part...

The Judge has stated the Govt. acted with gross negligence and careless in handling this case...

What the hell happened here? From everything that I heard this was an iron clad open and shut case. We're working on more updates and will post more as soon as we can.