What's good for the goose...

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Time and time again throughout the various mortgage fraud cases we've written about we find a reoccurring theme used by the government to go after the alleged fraudsters.  In the Plantation Cops mortgage fraud trial, it seems that every other word out of the prosecutions mouth is that the defendants had made false statements on their 1003 loan applications, specifically that the borrowers lied about the property that they were borrowing on being their primary residence.  From the indictment...

e. Defendants signed and caused to be signed at closings Affidavits of Occupancy, Mortgage Notes, Disclosure Notices, Borrowers' Certification and Authorization forms, and other documents indicating that the property they were purchasing was to be owner-occupied and their primary residence, when in fact, these defendants had no intention of living in these properties...that upon the occupancy of the property, they would not have any other permanent and primary residence; and that they were not occupying or purchasing the property for investment purposes;

Simple enough, the governments contention is that by the borrowers allegedly lying about the homes in question being their primary residences, they were able to enjoy a lower interest rate and therefore lower monthly payments for these homes that were actually investments purchased solely with the intention of resale.  Despite the fact that it's been proven ad nauseum that the borrowers did not indicate that they homes were going to be primary residences and that it was the mortgage brokers, Matt Gulla and Rene Rodriguez Jr., that had altered the loan applications and forged the borrowers signatures to reflect that the homes that were being purchased were going to be primary residences, every chance the prosecution gets they ram this primary residence thing down the courts throat.  Once again...

Form 1003, for the first mortgage loan on said property and occupancy agreements for the first and second mortgage loan on said property, which contained materially false and fraudulent statements.

I'm not sure why the prosecutors keep harping on this "primary residence" thing but judging by their reluctance to let up on the home the borrower resided in (regardless of the fact that it's been proven that the borrowers had not declared the homes were primary residences or not), you'd think that lying about your primary residence is a big deal, in fact from what we've now learned it's a federal offense!  That brings me back to another instance we've seen where one of the people we've written about has lied about their primary residence on a mortgage, does anyone remember this guy...

That's City of Miami commissioner Marc Sarnoff, the same commissioner that seemed to have trouble figuring out where his primary residence was, from our friends over at Investigation Miami...

So here's the rundown of Marc Sarnoff's primary residences per mortgage records:

• 1993 3197 Virginia

• 1998 3000 Shipping

• 2000 3100 Virginia

• 2001 3197 Virginia

• 2002 3100 Virginia

• 2010 Marc Sarnoff - 3000 Shipping, Wife Teresa - 3100 Virginia

Based on what we've seen in the various mortgage fraud cases we've written about, shouldn't this be a major issue?  Once again from Investigation Miami...

I wonder what the bankers would think of a guy too cheap to pay a little higher interest rate on an investment property loan so he would not tell the truth by saying the property is his primary residence.   I wonder what the Florida bar would think of an attorney who has demonstrated a habit of fibbing on bank loans.  I'm not naive, I know a lot of people do it.  But Marc David Sarnoff is an attorney.  And to him, the LAW should be gold....or something to that effect.

So what gives here?  We've spent months on end hearing the federal prosecutors beat this lying about your primary residence thing being a federal criminal offense into our head, so why haven't the U.S. Attorneys who are so fond of this concept charging commissioner Marc Sarnoff for the same thing?  In fact, Frank Alvarado from the Miami New Times even went so far as to write the U.S. Attorneys office a letter about Mr. Sarnoff lying on his mortgage applications...

Wilfredo Ferrer
United States Attorney, Southern District of Florida
99 NE Fourth St., Miami, FL 33132

Dear Mr. Ferrer,

Banana Republican commends you for cracking down on the scoundrels responsible for the rampant mortgage fraud plaguing South Florida. With that in mind, we want to bring a related case to your immediate attention. We have reason to believe Miami Commissioner Marc Sarnoff is gaming the mortgage lending system.

A man with your keen understanding of mortgage applications knows that when buyers apply for a home loan, they are required to reside at the property if it is not for investment purposes.

Well, it seems Commissioner Sarnoff -- a Florida Bar-admitted attorney who authored ethics legislation for city officials -- has abused the requirement in order to obtain lower interest rates. Banana Republican has reviewed the commission chairman's mortgage documents for three properties he purchased in Coconut Grove between 1993 and 2000. We're pretty sure he hasn't lived at all of them at the same time.

• 3197 Virginia St.: Sarnoff purchased this lovely two-story townhouse for $160,000 in 1993. According to the loan documents recorded with the Miami-Dade County clerk's office, he was required to occupy the property as his primary residence.
• 3000 Shipping Ave.: Five years later, the commissioner upgraded to a beautiful abode for $240,000. Even though he was still required to live at 3197 Virginia per that property's loan documents, Sarnoff affirmed he would reside at 3000 Shipping, according to the mortgage he signed with Northern Trust Bank. 
• 3100 Virginia St.: In 2000, Sarnoff expanded his real estate portfolio when he paid $340,000 for this residence next door to his Shipping Avenue home. His lender, Citibank, stipulated he had to reside at 3100 Virginia. Of course, he was already required by his other mortgage lenders to live at 3197 Virginia and 3000 Shipping.
• What's more, Sarnoff refinanced 3197 Virginia in 2001 and 3100 Virginia in 2006. He again signed documents stating the properties would be his primary residences. (Sarnoff sold 3197 Virginia in 2002.)

We don't need to tell you that lying on mortgage applications has landed a lot of people in trouble in these days of rampant mortgage fraud. Indeed, this past August 30, you squeezed guilty pleas from four defendants who had set up fraudulent mortgage transactions by falsifying information on loan applications.

In the late '90s, then-Miami Commissioner Humberto Hernandez was convicted of using false documents to secure loans from financial institutions. The same treatment should be afforded to Commissioner Sarnoff.

With sincere regards,

Banana Republican

I suppose the claims of selective prosecution by the defendants in the Plantation cops mortgage fraud trial who are accused of doing exactly the same thing that Sarnoff did doesn't seem so far fetched after all.

It's time for a VACATION! Not for us, but at least it is for the judge presiding over the Plantation Cops federal mortgage fraud trial.

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I was perplexed over the nearly three week court recess we discovered yesterday right in the middle of the ongoing Plantation cops mortgage fraud case.  How could you take three weeks off during a federal criminal trial?  I did a little digging and found that the break was due to Judge James Cohn's vacation schedule.  I'm not exactly sure how the trial got scheduled in such a way that it could have potentially conflicted with the judges vacation, regardless, I think this is a fantastic opportunity for the defendants.  Take into account that they've been going at it for over 25 days now, right in the thick of things the defense attorneys get a breather, time to reevaluate their strategies and regroup.  In my opinion, this is a huge advantage.

With that said, I'm signing off early today, in the mean time, take a look over at Investigation Miami and see how a few local bloggers are bringing down City of Miami mayor Tomas Regalado's house of cards.

I got a million problems but paying for gas ain't one of them!

No shit?!  With fuel prices hovering in the mid four dollar range, there isn't a single one of us that whose wallet hasn't taken a hit, that is unless you work for the City of Miami fire department.  I got stuck having to drive up to northern Broward county (ugh) last Thursday, lo and behold three quarters of the way up the county I come across one of the City of Miami's finest...

What struck me as strange was that I happened upon this City of Miami employee at 2:50 PM and like I said in northern Broward county of all places...

It's no secret that the overwhelming majority of the City of Miami fire fighters are well compensated (six figures plus) and that there's some that have take home cars.  It's also a well known fact that there are many that live outside the city.  I continued north on I-95 till I got to my exit (Hillsborough Blvd) which was the northernmost exit in Broward county, the city vehicle pictured above kept going, presumably into Palm Beach county.  

So what was this City of Miami Fire department employee doing?  On their way home perhaps?  Maybe on the way to their second job?  What really pissed me off about this incident wasn't the fact that a city employee was driving a city owned car two counties away or the fact that the city employee was two counties away during the mid afternoon, what pissed me off (especially after spending SEVENTY DOLLARS TO FILL UP MY CAR) was the fact that the city of Miami's taxpayers were paying for this guys gas!


Al Crespo, Investigation Miami and Take Back Miami have all done fantastic jobs illustrating the waste and outright graft that's occurring in the city on several other fronts.  Look at the measures the city is taking to fill it's budget gaps (ad murals on city buildings, red light cameras, etc) while they're throwing away money paying for things like take home cars and fuel for non emergency fire department employees.  

What really puts things in perspective though is the fact that the investigators that are building cases against some of the city employees with a penchant for criminal behavior make a fraction of what they do therefore giving them that extra bit of motivation when building a case.  Stay tuned, there's another indictment just around the corner...

The shit hits the fan, Judge Cohn issues an arrest warrant Attorney Michael Dennis Walsh and the judge that presided over the Bernardo Barrera mortgage fraud case resigns!

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It was one hell of a day yesterday!  First the judge presiding over the Plantation cops mortgage fraud trial issued an arrest warrant for attorney Michael Dennis Walsh for missing the first day of trial and missing the "order to show cause" hearing.  We had been told that Mr. Walsh had a minor heart attack and was hospitalized just before the trial but...

On Monday, Walsh went to South Miami Hospital, but U.S. marshals were unable to find him when they went there to serve him with papers on the hearing set for Tuesday morning, according to authorities.

When the U.S. Marshals couldn't locate Mr. Walsh...

U.S. District Judge James Cohn issued the contempt order. The marshals are now looking for him to serve the warrant. 

YIKES!  The Miami Herald goes into further detail regarding the ugliness of Mr. Walsh's recent circumstances.  We've been told that not only did he suffer a minor heart attack but a nervous breakdown as well.  Hopefully Mr. Walsh is able to recover and represent his client, Mr Guaracino.

On another note, yesterday we also learned that the judge that presided over the Bernardo Barrera mortgage fraud case, Mary Barzee Flores, has decided to resign and go into private practice, from the DBR article...

“The enthusiasm among some in Tallahassee to slash spending on our court system, coupled with the staggering volume of new case filings driven by current economic conditions, poses a grave threat to our society.”

I'll keep my opinions of her honor to myself, but I will say this, it's a sad state of affairs when a City of Miami firefighter makes more (in some cases double) than a circuit court judge!


Lastly, take a moment and checkout today's post on Investigation Miami, from the story...


On the agenda for Thursday's commission meeting.....a request by Michelle Spence-Jones that the city of Miami reimburse her for $113,439.40 of legal fees incurred during her "successful defense of two charges brought against her by the State of Florida."


Can you imagine that?  Now that Spence-Jones has been acquitted in her first criminal case, the taxpayers are on the hook for paying her legal fees!  The word on the street is that the second case against Spence-Jones is about to get dropped before trial (unconfirmed), if the City is responsible for paying her legal tab on the first, they'll certainly be responsible for paying the legal fees on the second as well.  Even if the case doesn't get dropped before trial, can you imagine the jury convicting her in light of the recent revelations of prosecutorial misconduct and the recanting of testimony from the state's key witness? 

So what happens to websites and online documents that are highly critical of local government? What the hell happened to the Miami Dade County Independent Review Panel records online?

The answer should be obvious.  Case in point, the local blog that was turning the City of Miami politicians inside out, Miami for Change.  

Go to the site now and it looks like this...

From what we've heard through the grapevine, Commissioner Marc Sarnoff pulled the right levers and got the blog that had uncovered his nefarious activities shut down.  From the Investigation Miami Blog we get this:

We also got some really creepy information yesterday about a meeting on Monday at the Miami Police Department's Internal Affairs Office.  That meeting was ostensibly held with Marc Sarnoff, Chief Exposito, an assistant chief and head of IA, Al Alvarez.  Alvarez and Sarnoff are very close - Alvarez was Marc and Teresa Sarnoff's police chauffeur for several years. Alvarez reportedly continues to spend hours and hours every week in Sarnoff's office despite having become a member of the brass with his appointment to head of IA.
The information we were given is there was going to be an attempt to shut the blogs down because Sarnoff is really, really, really pissed off about our posts.  But really, I can't imagine that could be done by a two-bit cabal of those "Einsteins."

So much for first amendment rights and freedom of speech huh?

Regardless, for those of you familiar with our blog and one of the many mortgage fraud cases we've written about, the Bernardo Barrera mortgage fraud case, you'll remember we initially learned about the cop that was involved with that case, Jorge Baluja, through records that were available online from the Miami Dade County website.  The records in question were the findings of the Miami Dade County Independent Review Panel that investigated the Blanton Harris traffic accident that Detective Baluja screwed up royally.  Matt Meltzer wrote about the incident on the Miami Beach 411 website.  We also learned last year that due to budget cuts, Miami Dade County was going to cut the funding for the Independent Review Panel.  Doesn't that make sense?  Why not cut out a panel comprised of citizens that investigates complaints against cops and other county officials?  Who the hell needs these trouble makers anyway?  In fact, if we go back to the minutes of one of the meetings of the Independent Review Panel you can see the disdain against the IRP from the Miami Dade County Police Departments top brass...

That's too bad ain't it?  The police Chief is worried about his reputation being tarnished because the Independent Review Panel exposed him and his cronies sweeping an internal affairs case under the rug?  The IRP answers with this...

Right on!  Are you guys nuts?!  The IRP busts you guys and you want there findings taken offline?  Nice work IRP!

All good right?  For once the good guys prevail!  WRONG!  Let's go the the link that lead us to the IRP's report and findings regarding the Blanton Harris traffic incident, what do you get?

OH SNAP!  That can't be right!  What about the minutes of the hearing where the Chief of Police was bitching about his reputation being tarnished?!  

Everythings GONE!  Just like that, someone in the command staff of the MDPD complains and POOF!  Any evidence of their malfeasance disappears!  WTF!  Don't fret though folks, we still have copies of both reports.  Here's the IRP's report and findings regarding the Blanton Harris traffic accident...

IRP Minutes of Blanton Harris traffic accident investigation where MDPD top brass want the report erased fr...

And let's not forget the minutes of the IRP meeting where the Police Chief was bitching about his "tarnished reputation"...

IRP Minutes of Blanton Harris traffic accident investigation where MDPD top brass want the report erased fr...

Although the Miami Dade.gov page says these pages might be "temporarily unavailable", they've been this way for months.  Considering what we've seen recently regarding the Miami for Change blog being taken down, does any of this surprise anyone?

Who the hell reads those damn mortgages!

"What I’m doing is taking away the ignorance is a defense argument.”

               

                            - Commissioner Marc Sarnoff

Really now!  But what if you did actually take the time to read your mortgage before you executed it?  Say for example, you were to take a look at the mortgage for the property located at 3000 Shipping Avenue, what exactly would you find?

Marc Sarnoff Mortgage for 3000 Shipping Avenue Home From Country Wide Home Loans

Among other things you'd find this part that says something about the home in question being your primary residence...

Now, this could present a bit of a problem if say you weren't exactly honest about which one of your homes was your primary residence.  The Investigation Miami blog shed some light on this issue last Monday, so could this mean that the mortgage is in default if the borrower has been somewhat less than honest regarding the occupancy of the property?


Moving on, here's another standard part of the mortgage document that "no one reads" that may be of concern to some...

Now that would really be a problem for the borrower if say they got one of these letters stuck on their door...

That ain't no good now, is it?  According to the Crespo-Gram Report, Mr. Commissioner Sarnoff has been running an illegal law office out of the home located at 3000 Shipping Avenue for nearly a decade.  According to the mortgage document that illegal use of the banks collateral creates an issue for the borrower now doesn't it?

Throughout the course of our blog we've seen several instances where the police and prosecutors have vigilantly gone after people who didn't abide by the fine print in their mortgages, does anyone think they'll do the same in the case of Mr. Commissioner Sarnoff?  In fact, the entire case against the attorney that was charged in the Bernardo Barrera mortgage fraud case was based on the attorney allegedly not following the boilerplate fine print on the closing instructions!  Does anyone even believe that there is a real investigation going into the allegations of impropriety regarding Mr. Sarnoff's mortgages?  Anyone?  Good luck with that!