You all remember attorney Stephen Orchard, don't you? Mr. Orchard was one of the two attorneys that were federally indicted as part of the Plantation Cops mortgage fraud case who on the eve of trial was given a sweetheart deal by the prosecutors and sent on his way. Let's not forget that Mr. Orchard was accused of committing among other things conspiracy, mail fraud, wire fraud, and obstruction of justice for his part in the over sixteen million dollar mortgage fraud scheme that the feds labeled "Operation Copout". I'm not sure how, but somehow this evening I stumbled upon Mr. Orchard's law firm's website and couldn't help but wonder what's happened since the government cut him loose from the criminal case. From the looks of the website, Mr. Orchard seems to be doing just fine, but I wonder, what happened to the investigation into Mr. Orchard's involvement with the alleged frauds involved with the Plantation cops case? A quick glance at Mr. Orchard's bar page reveals no disciplinary actions...
That's all well and good for Mr. Orchard but what about his former boss and fellow defendant attorney Steven Stoll who was also federally indicted for his role in "Operation Copout", we know the government chose not to retry him after his first trial ended with a mistrial, but what about the Florida bar? From Mr. Stoll's bar page...
David Rodriguez
You guessed it, NADA. What's the big deal you ask? No big deal I guess, I just wonder, why is there such great disparity in how the organization that regulates and disciplines attorneys handles different cases? Those of you who've been following our blog for a while surely remember attorney David Rodriguez who was the target in one the Miami Dade County Mortgage Fraud Task force's first cases. The cops had Mr. Rodriguez dead to rights, after all he was negotiating the crooked deals with an undercover cop who just happened to be one of the members of the Task Force! Surely by now nearly four years after his arrest and subsequent plea, Mr. Rodriguez must have been disciplined by the Florida bar, right? Once again, from his Florida Bar page...
Anyone surprised? Four years after his arrest, four years after a plea and the subsequent sealing of his criminal record, not a single action from the bar.
Once again, what's the big deal about any of this? No big deal I guess unless you've picked up on the fact that whether it's the Florida Bar or the state attorneys office, their choice of prosecutions seems to be highly selective. While some people are put through the ringer, others aren't even investigated. Maybe I'm nuts, but I'm of the belief that if an attorney pleads out to a crime, they should receive some sort of discipline from the appropriate professional governing bodies. Let's see if they still sit back and do nothing after we get done filing our complaints.
Federal prosecutors said Wednesday they are dropping all criminal charges against a Fort Lauderdale lawyer and a former police officer arrested last year in a mortgage fraud investigation.
The decision to dismiss the cases against attorney Steven Stoll and former Plantation Police Officer Dennis Guaracino comes a month after a Fort Lauderdale federal jury deadlocked on the charges against them.
The two men and Joseph Guaracino, who is Dennise Guaracino's brother, spent more than five months on trial defending themselves against allegations resulting from "Operation Copout" — an inquiry into a group of police officers involved in suspicious real estate transactions.
The U.S. Attorney's Office will continue pursuing its case against Joseph Guaracino, whose first trial also ended in a hung jury, federal prosecutors told U.S. District Judge James I. Cohn.
That's great news for attorney Steven Stoll and Dennis Guaracino but not so great news for his brother Joe who looks like he's going back to court to face a second trial which is set to start on December 5, 2011.
As we all know by now, the second phase of the Plantation cops mortgage fraud trial ended in a mistrial with a hung jury 10-2 in favor of acquittal. The second phase of this never ending case was the governments attempt to convict alleged ringleader Joseph Guaracino, his brother Dennis and the attorney who owned the title company that the alleged fraudulent transactions went through, Steven Stoll. After nearly a week of deliberations, the jury let the judge know that they've voted several times and haven't been able to come to a unanimous decision, here's the actual note to the judge...
Presumably the jury is told to go back and deliberate some more and think the case over during the weekend after 5 full days of deliberation in an effort to come back with a unanimous decision, again they tell the judge they can't...
And finally after listing to the intricacies of mortgage and real estate transactions for nearly four months, the jury finally throws in the towel...
An with that, this ordeal came to an end, at least for now. The government has 70 days to refile the case against the three remaining defendants, you have to wonder though, will they? Think for a moment what this epic mortgage fraud prosecution has cost the government, nearly five years of investigations, possibly hundreds of interviews and countless hours of scouring over tens of thousands of documents unintelligible to all but the most experienced mortgage and real estate professionals. And how about the costs of actually trying this case and the one that preceded it? The government has been at it since the beginning of 2011, first with the first group of defendants and now the second group. After nearly nine months of slogging this mess through court, what do they have to show for it? Two convictions out of 6 defendants in the first trial and now a mistrial for the remaining 3 defendants? Can you imagine trying to justify those results in the private sector considering the millions that have been spent to achieve the two convictions? Also keep in mind that the two guys convicted were low level members of the alleged conspiracy according to the government. The government couldn't convict the alleged "big fish" or "mastermind" of this case, Joe Guaracino, let alone the attorney, Steven Stoll, that the government claimed facilitated the transactions in question. Does this make any sense to anyone?
Now, assume that the government is going to go ahead and retry this case for a moment. Remember, the prosecution fought tooth and nail to keep any evidence of "lender negligence" out of these two trials. Defendant Stoll's attorneys even filed a motion to dismiss based on the governments new lawsuits against the banks that were at the center of our nation's economic meltdown. Although the judge didn't allow the jury to hear about any evidence regarding the banks part in this mess, considering the new actions by the justice department against the lenders, do you think there's a chance in hell that they judge could keep this from the new jury if the case is retried? The whole concept of retrying a case that ended in with a hung jury seems inherently unfair to me. Isn't the mere fact that the jury ended in a 10-2 vote, meaning only two people bought the prosecutions case, enough "reasonable doubt"?
Tomorrow the two defendants that were convicted in the first trial, John Velez and Joseph Derosa, are going to be sentenced in federal court. I have a hard time understanding how they were convicted yet the other codefendants who were charged with doing the exact same thing they did were not. Regardless, in light of the outcome of the second phase of the case on Monday, we can only hope that the judge shows some level of leniency towards these guys who have had their lives and careers destroyed by this mess.
As the title states, our sources tell is that after six days of deliberation the trial ends with a hung jury! From what we're told it was 10 to 2, which means 10 of the 12 jurors were going to acquit. The question now is whether or not the government is going to retry the case or just walk away...
Another gem from the folks over at M&M liquors, even the folks in Hialeah know what time it is...
Still waiting on a verdict on the second phase of the Plantation cops mortgage fraud case, considering they're on their fourth day of deliberations, what do you guys think, good or bad?
WTF with the timing of this story? The story is about the cops from the first part of the case, two of them were found guilty and two were acquitted, the two that got acquitted got their jobs back and the back pay and benefits they were entitled to. Really? How's this news? We covered this story almost a month ago! Why is this news now? My assumption is that this story was planted by the government over the weekend in order to in some way shape or form influence the jury that was about to render judgement against the remaining defendants. Dirty trick? No doubt as it's damn near impossible to get a juror to crawl under a rock and ignore what's in the media regarding a case their deliberating.
Assuming the intent of this story was to in some way to influence the jurors, maybe we can do a bit of the same? See the government fought tooth and nail to keep a ton of favorable information from the jurors that could have helped the defense. Let's take a quick run down of just some of the facts the jurors didn't get to hear...
Defendant Joseph Guaracino cooperated fully with the FBI and FDLE years before there was even an indictment including but not limited to handing over every single shred of documentation regarding all the properties that he ever bought and sold. Does this seem like the actions of a guilty man?
The government continually insinuated that the defendants tax returns were bogus, yet throughout the trial they were never able to prove the allegations. The nearly four months of trial were continually peppered with allegations of inflated appraisals for the homes in question, why wasn't this ever proven in court? Why didn't a single "expert witness" come forward and prove that the appraisals were bogus?
The defendants voluntarily took polygraph tests and passed, why weren't the results allowed in for the jury to consider?
How about handwriting exemplars which proved the defendants on trial didn't forge anything but again the jury wasn't allowed to hear about it.
There were several recordings where the brokers at the center of this mess admitted to forging hundreds if not thousands of documents throughout there careers, yet again the jury wasn't allowed to hear about it.
Most importantly though, why wasn't the jury allowed to hear about the lender negligence, especially when the federal government went ahead and sued all the big lenders for their role in the real estate meltdown that subsequently brought our economy if not the worlds economy to it's knees?
I have no idea how this is going to pan out for the defendants on trial, I just can't seem to understand how the jury can render a verdict when they weren't allowed to hear evidence that in my opinion was crucial to the defense. We'll have to wait and see, we could have a verdict as early as tomorrow...
After a long arduous four months, the Plantation cops federal mortgage fraud trial finally went to the jury yesterday. The jury has requested to take today and the remainder of the weekend off, so deliberations won't begin till Monday at the earliest.
Let's take a quick look at some twists and turns of the governments case against former Plantation cop Joe Guaracino and his brother Dennis. At first the government argued that the alleged mastermind of the frauds got nearly a million dollars back in total from the real estate transactions that are at the center of the federal indictment. The governments position was that that Guaracino and company scammed the closings through questionable huds and purchase contracts but during the course of the trial the defense proved that every penny that Guaracino got from these closings plus nearly a million of his own money was put back into these homes through renovations in order to make them suitable for resale at a profit. In closing, the government moves away from their original theory and instead personally attacks Guaracino for among other things being a gambler!
What the prosecution couldn't get around though was the fact that the homes in question were sold and the banks who lent the money were paid back. The governments theory was that the banks were the victims of this alleged mortgage fraud scheme, my question then is why weren't any of these alleged "victims" ever brought in to testify? There wasn't a single lender that was allegedly exploited by Guaracino and his group ever brought before the jury to testify, not a single one, no one that had anything to do with reviewing and approving these loans was ever brought before the jury. I wonder why?
So how could you put a case like this together? How could you indict a bunch of cops and two attorneys that have no previous records of misconduct with such a flimsy case? I'm going to guess there was some sort of motivation from the higher ups at the Plantation PD who had a vested interest in bringing these guys down. I'm trying to figure it out myself, I should have some better answers by Monday.
Now, on to the mess in the City of Miami and suspended police chief Miguel Exposito. Over the last couple of months all you hear about in the media and the blogosphere is how stupid the chief is, what a dimwit his second in command is, etc. Let's think about that for a second, could Chief Exposito really be an idiot? Remember, Mayor Regalado hand picked Expo to replace former city of Miami police chief John Timoney within hours of the mayor taking office. All Expo had to do from that point forward was to chill out and be the Mayors yes man and his job would be safe. Fire this guy, promote that guy, look the other way on this matter, make some files disappear on another matter etc. Follow the mayors orders and as long as the mayors got his job, so do you. Easy enough right? Instead of falling in line and being a doormat like city manager Johnny Martinez, Expo and his gang decided to take on illegal gambling in the City of Miami. Anyone who lives in Miami is intimately familiar with these illegal gambling machines aka "Makinitas", take a look at one of them in action courtesy of our friend Frank Alvarado over at the Miami New Times...
From the New Times article...
Machines like the ones German operates have been the lynchpin of Exposito's accusations against Regalado. The embattled police chief claims the mayor meddled into criminal investigations and raids involving illegal gambling at city cafeterias and bodegas. In October, Regalado championed an ordinance that would fine merchants $500 and allow them to keep the machines, instead of arrest them on state misdemeanor charges of illegal gambling.
Think about it for a moment, if the Chief was such an idiot, why would he go against his benefactor, Mayor Regalado, who's rumored to be in bed with the organizations that are behind these machines? Why would he risk a cushy six figure plus job? My opinion? Regardless of the perceived inadequacies of Expo and his crew, at the end of the day they saw theses machines and the people behind them for what they were, nothing more than an illegal racket that preyed on the poorest people of our beloved city and he decided to go after them. Does that make him an idiot or was he simply doing what any law enforcement officer was supposed to do? In my opinion, idiot or not, you can't fault the guy for doing his job.
The fight against these machines and their owners may have cost the Chief his career, but trust me, if Expo gets fired today, he's not going to go away quietly, we can expect a hefty whistle blower lawsuit from the Chief in short order, then there's the matter of all those federal criminal investigations that the Chief initiated against the Mayor and his crew, it's just a matter of time before all that ugliness comes to the surface. Let's not forget about those pesky wiretaps! How is the Mayor going to explain all that away?
It looks like federally indicted attorney Steven Stoll's defense team hasn't been sleeping much lately. Just last Monday they filed this excellent motion to dismiss, take a look for yourselves...
How ironic? The prosecution fought successfully to have even the slightest hint of lender negligence withheld from the jury, all the while not mentioning to anyone that since July 2011 the very same government that was fighting so hard to exclude lender negligence from the jury was investigating the very same lenders for “potential fraud related to the origination and/or underwriting of mortgage loans”. How do you like them apples?! What have we been saying all along about the banks being the unindicted co-conspirators in these mortgage frauds?!
It's not bad enough that the government fought to exclude this lender negligence/misconduct from the jury, but by withholding the information regarding the investigation from the defense, they've actually broken the law. Anyone remember us talking about Brady violations a while back? Let's take a look at some components of the Brady Rule...
Duty to Disclose: The landmark decision of Brady v Maryland (1963) places an affirmative constitutional duty on a prosecutor to disclose exculpatory evidence to a defendant. This duty has been extended to police agencies through case law, requiring law enforcement agencies to notify the prosecutor of any potential exculpatory information.
Exculpatory Evidence/Brady Material: Evidence in the government’s possession that is favorable to the accused and that is material to either guilt or punishment, including evidence that may impact the credibility of a witness.
The defense team had argued from the get go that the lenders negligence was key to their defense, yet the government didn't want the jury to hear a peep about it, considering the fact that the federal government had an ongoing investigation into the very lenders in question for their conduct and role in the real estate and economic meltdown, didn't the government have a "duty to disclose" this information to the defense let alone the jury? Even worse, Steven Stoll's attorneys specifically asked for information relating to any government investigation concerning these lenders back in the summer of 2010...
More specifically, by way of letter on August 20, 2010 (a copy of which is attached as Exhibit 3), Mr. Stoll’s counsel specifically demanded disclosure of “[a]ny criminal complaint and/or investigation to any state or federal investigative agency or any civil complaint or administrative action, relating to any lender involved in or associated with any defendant and/or the 68 loan transactions, as well as any civil litigation relating to these lenders.”
The government comes back with...
“[t]he government has no information or documents that are responsive to Defendant’s request #8 concerning criminal and civil complaints and investigations against lenders involved with the 68 fraudulently acquired properties, or associated with any defendant.”
No kidding? So these massive lawsuits being filed by our government against these lenders recently just appeared out of thin air? The complaints were just thrown together overnight? If the Plantation cops mortgage fraud case took nearly 5 years to put together, how the hell are we supposed to believe that the government hadn't done any investigating into their case against the lenders as late as last summer? BULLSHIT! Again, from the motion...
Although the Government has acknowledged the continuing nature of its Brady obligations to Mr. Stoll, no disclosure of the Department of Justice investigations or the damning allegations against the lenders regarding their failure to follow underwriting practices was provided to the defense by the prosecution in this case.
Why would the defense expect the prosecutors to hand over exculpatory evidence that could destroy their headline case? It's not like they're bound to do so by law or anything! Again from the motion...
To add insult to injury, the Government has actively resisted, and for all intents and purposes, has succeeded in thwarting the defendants’ attempts to introduce evidence of lenders’ willful failure to follow the underwriting guidelines, their financial incentive for doing so, and the resulting impact upon the reliability of the “lender files” in evidence. The Government did so under the guise that there was no evidence that these lenders were engaged in these practices. However, as demonstrated in the 17 complaints recently filed by the Government, as well as existence of one or more Department of Justice investigations into the underwriting practices of these lenders, the Government has taken a diametrically opposed position regarding these lenders elsewhere.
As the record stands, the jury in this case has been deprived of substantial favorable evidence to the defense regarding the lenders’ actions, intent, motive, and the lack of materiality of the statements and alleged omissions in dispute in this case.
Moreover, the Government, in a disingenuous substitute for testimony from lender representatives with actual knowledge of the underwriting and approval of the loans in this case, has presented testimony from former lender employees and purported expert witnesses with no personal knowledge about these loans to testify that the lenders did actually follow underwriting guidelines, and to testify that the statements and alleged omissions in dispute in this case were material to the lenders’ decisions to approve these loans.
In addition to being deprived of the favorable evidence regarding the failure of lenders to follow underwriting guidelines, the Government’s failure to disclose the existence of the investigation(s) of the lenders by the Department of Justice also deprived the defense of the ability to impeach the credibility of the “lender files” being relied upon by the Government, as well as the potential motive and bias of the lender representatives called by the Government as witnesses in this case.
Each of the lender witnesses, having been employed by lenders during a time period when according to the recently filed Complaints they were engaged in massive frauds on government agencies and others purchasing mortgage backed securities, had an undisclosed and unexplored motive to color their testimony so as to minimize their own potential culpability and involvement in the fraud. These witnesses had a similar motive to minimize the culpability of their former lender employers.
Further, if the Government had informed the defendants of the investigation of the lenders, and the fact that the lenders had a financial motive to conceal their failure to follow underwriting guidelines within their own files, the defense would have had the ability to impeach the credibility of the lender files produced in this case, and would have been able to present a compelling explanation for the absence of certain documents (such as conversation logs, escrow agreements, emails, etc.) from the lender files.
The Government, on the other hand, in taking full and unfair advantage of the lenders’ purging of files, has been pointing to the lack of such documents in the files as evidence that the lenders were never aware of the escrow withholds and sourcing of deposits from the third parties.
Accordingly, the Government’s Brady violation has impacted this case in multiple, varied and profound ways to the detriment of Mr. Stoll.
Defendant Stoll's attorneys killed it. Great job. The question now is what's the judge going to do? Will he do the right thing and throw this case out or is he going to cover the governments ass?
In other news, it looks like or least favorite attorney, Raquel Regalado, daughter of embattled city of Miami mayor, Tomas Regalado, has opened up a new law office. From the Florida department of state's website...
It looks like the Mayor's daughter has opened up a new law office, whose principal place of business is located at 1745 SW 15 st which is located in the city of Miami and just happens to be her home address as well. So from what we're to deduce from the filings with the state, is Ms. Regalado going to run a law office from her home? Deja vu anyone? More importantly though, what happened to Ms. Regalado's gig over at the prestigious IP law firm, Malloy & Malloy? Is it possible that all the Regalado monkey business of late was a bit much for the well established and conservative principals of the law firm? Who would want an attorney practicing within their firm with the air of possible pending criminal charges surrounding them? A quick search of the firms website reveals the conspicuous absence of Ms. Regalado from the firms attorney page, I wonder what happened?
Throughout the ongoing saga that is the Plantation cops mortgage fraud trial, one of the governments contentions is that the alleged mastermind of the mortgage fraud scheme, Joe Guaracino, pocketed nearly $1.2 million dollars from escrow withholds and other credits at the closings for the properties that are the subject of the federal indictment. As we mentioned last Friday, this week was going to be Mr. Guaracino's chance to explain everything while on the stand, from the hearing yesterday...
Q: Did Joseph Guaracino of Home Buyers Group get money back on these occasions?
A: Yes, on most occasions we did.
Q: What was the purpose of getting money back?
A: To do whatever was state, remodeling, upgrading, in some cases, buying furniture.
Q: What did you do with that money?
A: Exactly that.
Pretty simple, right? There were credits given to the buyers from the sellers for various improvements to the homes and the money was disbursed to the buyers at the closing, these would be the same funds that the government alleged was misspent or misappropriated by Guaracino and/or his group. Before the indictment, Guaracino was asked to produce evidence of the money from these transactions being used for their intended purpose, there's a small problem though, take a look for yourselves as defense attorney Michael Walsh and Guaracino go through and compare the receipts the government produced to the court versus the receipts that Guaracino produced to the government...
Q: Let's do this, let's take our time and go through the Government's evidence. Do you see a receipt on the Government's for 8443?
A: I do not.
Q: Is there a real receipt in there for 8443?
A: Yes, sir, on the second page.
Q: Do you know why those two receipts are missing from the government's chart?
A: It goes to the quality of the investigator.
WHOOPS! You get the idea, this search for receipts that are somehow missing from the governments evidence goes on and on and on. Somehow the receipts for the home repairs were given to the investigators pursuant to a subpoena yet somehow they never made it into the case files. As we discussed before, the difference between what the government came up with and what was really spent came up to roughly around $600,000. That's a rather large discrepancy isn't it? Why would the governments investigator play so fast and loose with these receipts? I mean, this is a paperwork intensive case where one of the main allegations against the lead defendant is that he misused funds that were credited back at closing, receipts are provided pre-indictment that shows were nearly every penny went yet the investigator and the prosecutors conveniently leave out nearly $600,000 worth of receipts? What gives here? Is it just me or is this starting to sound like some sort of set up?
There's something else though regarding the recent court proceedings regarding the second phase of the Plantation cops trial that's rather interesting. Out of the three men on trial, only Joseph Guaracino is putting up a defense, neither one of the other defendants, Dennis Guaracino or Steven Stoll, are putting up a defense. Could the governments case be so weak that a proper defense isn't necessary? Obviously the defense thinks so, it remains to be seen if the jury agrees.
Now, onto something even more disturbing, we caught this on the news last night...
That's City of Miami Assistant Manager Luis Cabrera banning or friend and fellow blogger Al Crespo from entering the Miami River Center, a City of Miami building that's open to the public! What a crock of shit. Here we have a blogger that's gotten a little too close to the real story and is finding the skeletons in peoples closets, unearthing the back room deals between incompetent boobs that make up our city government and what happens? They do whatever they can to shut you down. We're no stranger to this bullshit, as some of you already know, our work here has caused some of the people that we've written about to go to the MDPD, FBI, FDLE, etc to initiate investigations against us. No worries though, despite their best efforts, we're still here. Now that everyone's back from summer vacation, we'll have time to discuss some of the lengths that Assistant State Attorney Bill Kostrzewski and his boy Detective Baluja have gone through to get us shut down.
I've been trying to find out what's happened to the four cops that were acquitted in the first phase of the Plantation Cop's mortgage fraud trial. We know from the outset that FBI agent Robert Depriest was never suspended or removed from his job at the FBI, when he was indicted his own superiors at the agency came forward and said that they weren't going to suspend him since they thought that he had done nothing illegal to warrant a suspension. The reluctance of the FBI to suspend their own agent who was just federally charged for allegedly being part of a massive mortgage fraud scheme is a pretty damning indictment of the governments case against the defendants!
What about the other cops that were suspended without pay? What's happened to Plantation cops Joseph Lagrasta, Casey Mittauer and Daryl Radziwon since their acquittal? We're told that they've all been reinstated and have received their back pay for the period of time they were suspended. While we don't have any concrete evidence of such, the source that we obtained the information from has been 100% on the money in the past. We're told that although the cops have been reinstated that they aren't out on the road yet and that their is a pending internal affairs investigation within the Plantation PD regarding the officers involvement in the mortgage fraud case. We're told that the Plantation PD has assigned a Captain to "contact" defense witnesses in the second phase of the federal mortgage fraud case. Once again, we have no confirmation of this but let's assume for a moment that it could possibly be true. What purpose would it serve for a member of the Plantation PD to contact defense witnesses in the second phase of the trial other than to intimidate or coerce them? If indeed this trial is a "search for justice", why does it seem that the top brass at the Plantation PD is so heavily vested in making sure that the remaining defendants get convicted? I can't answer that question with a reasonable degree of certainty right now but I can tell you that there is much more going on in the upper echelons of the Plantation PD than meets the eye, alleged drug abuse, cover ups of nefarious deeds by the top brass, links to nefarious convicted criminals, etc. The truth is right around the corner, we'll have to wait and see...
Next week should be a duesy, from what what I can glean from the court proceedings it looks like the governments mastermind behind the Plantation Cop's mortgage fraud case, Joe Guaracino, is going to take the stand! From our minimal understanding of the criminal justice system, this seems like a rather unorthodox move as it opens up the defendant to direct questioning by the prosecution. It's going to be an interesting week for sure, if you got a few days to kill, I'd strongly suggest attending the trial and seeing the prosecutors go head to head with Mr. Guaracino!
Ever been sitting in court and wonder if a judge is biased towards one side or the other? It's happened to me, from the moment I sat down I realized that the judge wasn't hearing anything the defense was saying and was anxious to get the trial over with and rule for the plaintiffs. Disgusting when you see it first hand and rather disturbing when you realize that these holier than thou robed wonders are nothing more than human beings like you and I that are imperfect and capable of making mistakes, yet when they done that robe and sit upon their perch, somehow all that goes out the window.
Regardless, while watching and reading the court proceedings of various criminal trials over the last few years, I've seen judges from both ends of the spectrum, we had Judge Mary Barzee-Flores from the Bernardo Barrera case who looked and acted like she didn't want to be bothered with the case that was before her then on the other hand we have federal Judge James Cohn who's presiding over the Plantation Cops mortgage fraud trial who at least in my opinion seems to be more and more biased towards the prosecution and seems to be working to help them save their case against the defendants.
Don't get me wrong, he has his moments where he seems to throw the defense a bone now and again, but more often then not he seems to be on the governments side, case in point, the governments allegation that the loans used to purchase the homes that are part of the indictment where the homes were identified as primary residences by the borrowers in order to obtain 100% financing since according to the prosecutors 100% financing was not available for "investment homes". The defenses contention is that the mortgage brokers through their fake and forged loan applications indicated that the homes were going to be primary residence without the borrowers knowledge so the brokers could make more points on the loans since the banks paid more for primary residence loans because there was a higher probability that borrowers would pay these loans back. So what if the defense had an expert witness that contradicted the governments theory? If the defense had an mortgage and real estate fraud expert who was going to testify that there was 100% financing for "investment homes", wouldn't that negate the governments theory that the borrowers lied on the loan applications and identified the homes as primary residences in order to get the 100% financing? The governments witness stated earlier that there was no 100% financing available for investment homes, yet the defense witness stated that there was 100% financing available, no problem right? Yet the prosecution practically objects to every other word that the defense expert puts up, what's the problem? Based on what we've seen the prosecution and the judge through his rulings is doing anything and everything he can to removing the banks from the picture, we all know now that the banks were complicit by the very nature of their loose lending practices, so why can't the jury hear about it? We're all aware that towards the end of the real estate bubble the banks were practically giving money away to anyone with a pulse, in fact if you filed for bankruptcy, you could actually apply and get approved for a loan the day after your bankruptcy was closed, yet we still have the prosecutors in one way shape or form trying to defend the banks, take a look at this excerpt of federal prosecutor Rucoba cross examining defense expert witness Kurt Novy...
Rucoba: And are you aware the mortgage brokers testified that they forged the documents when they initially met and submitted those documents to the lender?
Novy: If that is their testimony, again, it would have no credibility. Once the document is forged, it is tainted. The well water is tainted.
Rucoba: The document is tainted, but how does the lender know they are tainted?
Novy: They didn't know
Rucoba: Exactly.
EXACTLY? Is it just me or does it sound like the prosecutor is trying to steer the blame away from the lenders? The lenders didn't know the paper work was bogus? We're talking about no doc, stated income loans here and your trying to tell me the lenders didn't know the loan applications and associated paper work could have been full of shit? Weren't these the same lenders who were telling the mortgage brokers what their guidelines were and what they needed to put down in order to get their borrowers to qualify? So why is the government trying to make the lenders out to be the victims rather than the villains? Simple, if you label the lenders as the bad guys, the governments case goes out the window, if you introduce the concept of "lender negligence" to the case then there is no case against the defendants, yet early on the prosecutors got the court to rule that the concept of "lender negligence" being wasn't admissible to the jury as a defense. Interesting, huh? So much for my unindicted co conspirator theory!
We'll leave you today with a video that explains the morass that our country's economy is in today, a visual aid that makes the depths and severity of our predicament painfully clear...
We can only assume this is a defendant's brilliant answer to some sort of paternity suit...
Brilliant in it's simplicity and brevity, unfortunately in real life nothing is that simple.
I'm not going to blather on today about how screwed up our court system is, what I will say though is that I'm deeply saddened by what I've seen transpire recently in the second phase of the Plantation Cops mortgage fraud case. We've seen several instances of the government objecting vehemently to the defendants introducing other instances of fraud committed by the governments cooperating witnesses, we've also seen several instances of the government objecting to the introduction of forged and or fake loan documents created by their cooperating witnesses Matt Gulla and Rene Rodriguez Jr, but that's not the worst of it. The defense has now come forward with allegations of witness tampering and even more grand jury misconduct by the government. From what we're told there have been several instances where people who were going to come forward and give favorable testimony for the defendants at the grand jury were told to leave if they were going to do so. We're also told that there's going to be evidence of FDLE and other government agents threatening to charge witnesses criminally if they didn't come clean with damaging testimony against the defendants. So far there hasn't been any evidence of these allegations provided to the court, according to what defense attorney Michael Dennis Walsh has told the court, the evidence of these nefarious deeds will be presented shortly.
Are any of these allegations by the defense plausible or are they simply a defense tactic designed to muddy the waters? Under any other circumstances I'd dismiss such allegations as being pure fantasy, but after watching how the criminal justice works over the last couple of years and seeing first hand the "win at any cost" attitude that seems to infect most law enforcement agents and prosecutors, I wouldn't be surprised if the allegations were in some part true. As outrageous as the claims of witness intimidation seem, they're no different in what we'd already seen in the Barrera mortgage fraud case where the cops basically intimidated their best witness into saying what they wanted under the threat of arrest.
One of our readers took the time to put together an analysis of the Plantation Cops mortgage fraud case as they knew it. Here it is...
The Governments Misconduct goes far beyond the average case. It appears the case was investigated by an FDLE agent who had no experience in Mortgage Fraud...
...he came up with a theory decided to name it operation COPOUT and once named in 2008 there was no stopping the targets they originally thought were guilty.
No stopping the agent once he thought his targets were guilty? Didn't we discuss this phenomenon a while back?
They made a deal with the two mortgage brokers. Then they relied on just those two brokers. They failed to properly investigate. They ignored information the brokers were destroying evidence
they had all the resources but never served a search warrant they just sent subpoenas and waited for the brokers and others to send documents gave them plenty of time to take out the real information that was sent to them and alter things.
Interesting point, why not just raid the mortgage brokers office, catch them off guard and take everything they got so they don't have a chance to filter out what they don't want law enforcement to see or worse, destroy evidence? Considering that the targets of this investigation were fellow law enforcement agents whose lives would be permanently altered by an indictment of this nature, why wouldn't they take the time to properly investigate this case?
Let's talk about their theory
First it was straw buyers then they acknowledged real investments
Then it was they took money and ran then they found out most homes had extensive remodeling and were sold
Then no repairs were done then close to 2 million in receipts cancelled checks and invoices and over a thousand pictures produced ( wouldn't a simple purchase and sale appraisal show the interior improvements done)
Then the indictment said the borrowers submitted false information
After the brokers plead they found out the brokers submitted all the false info
They also said there were forgeries all over the loans they ordered everyone to take handwriting exemplars accept that's right the brokers the exemplars said nope none of these guys did the fraud it doesn't match
Then through motions they found out the brokers committed over 1000 forgeries and every loan involved had a forged application and all disclosures sent to the lenders were forged by the brokers. So all the loans involved all the forgeries an fraud was committed by the brokers.
At this point, why not do the right thing, dismiss the charges against the cops and then nail the brokers to the cross?
Ok well we spent so much money and time an we already indicted all these people so let's just go with they knew or should have known. That documents they never seen or should have seen were forged and falsified because borrowers although there not involved in the loan process between a broker and a lender they should have thought to ask are you using my w2 and tax return? Or are you putting us in subprime loans with higher rates then what we qualify for so the brokers could get paid 100s of thousands in what are now considered illegal Yield spread Premiums.
Ok so we know the brokers did all the fraud and the whole case rest on the other defendants had to have knowledge.
Oh but we found out in the last trial the brokers did the same fraud to 1000s of others for over 10 years.
Instead of clearing 1000s of victims the brokers pull off there last big con! They make a deal then destroy other evidence and admitted on the stand oh yea we did all the fraud and to thousands.
Here's where I get lost, the government now has the mortgage brokers admitting that they've committed THOUSANDS of frauds over the last decade causing untold millions in losses to the banks yet the prosecution is still focusing on a handful of defendants whose worst crime is allegedly misstating their incomes on loan applications for loans that were ultimately paid off anyway? Let's not forget that it's already been proven in the previous trial that the defendants didn't even know that the brokers were doctoring the loan applications and forging their signatures!
I'm lost. Who exactly were the victims in the Plantation cops mortgage fraud case? The homes that are at the center of this indictment for the most part were purchased, improved then resold. Where's the problem? What am I missing?
Tough business defending yourself in a criminal trial, let alone a criminal trial in federal court. The defendants indicted in the Plantation cops mortgage fraud case have turned to the testimony of expert witnesses in the field of mortgage, real estate and financial fraud to help in their defense, there's on small problem though, the prosecutors don't want the jury to hear what the experts have to say. Let's take a look at the testimony that the prosecutors find objectionable, first from noted mortgage and real estate fraud expert, Curt Novy...
Nothing ground breaking there, Ms. Delomier's conclusions are ones that anyone with a modicum of common sense could reach and her conclusions are obviously beneficial to the defendants.
So what's the problem with these experts? The prosecutors filed a motion to have the most damaging parts of their testimony (at least in our opinion) excluded from the trial. Here are some examples of the testimony the government wants kept from the jury...
... lenders intentionally developed lax underwriting guidelines.
...lenders did not utilize prudent underwriting and risk management practices.
...lenders did not utilize prudent underwriting and risk management practices.
Isn't this what we've been saying all along?
...formed opinions that there were multiple identified areas where the lender/underwriter/reviewer had opportunities to notice discrepancies in documentation or items provided by the broker and/or title company
Very few factors were considered material in granting credit. Lenders ignored red flags because they knew borrowers did not truly qualify to purchase homes. Factors such as income verification, asset verification were not material to the lenders granting credit.
Of course they ignored obvious red flags, they needed to get the loans no matter what so they could go ahead bundle them and resell them as CDO's.
...borrowers would not have been aware that the Broker was not honest with the Lender.
Does anyone really believe that if the cops who were at the center of these alleged frauds knew that the could risk going to jail by lying on the loan applications that they'd actually go along with it?
In my opinion, the Brokers and in some cases the Title Company participated together to encourage the borrowers to just sign the documents to close the loan, as neither Broker nor Title gets paid if until the loan closes
Duh, I can't speak for the title company but you can bet that the brokers would do anything in their power to get a deal closed.
So what's the problem with the testimony from these experts? What's the government's objection to what they have to say? Take a look...
...the proposed testimony serves only to paint the lenders as irresponsible and encourage the jury to blame the lender for failing to prevent the fraud.
No kidding? OF COURSE THE LENDERS WERE IRRESPONSIBLE IN THEIR LENDING PRACTICES! WTF?! How could anyone not reach that conclusion!? Considering that the lenders complicity is an essential part of the defense, how could the court not allow this testimony? The court hasn't ruled yet, but considering how this court has ruled in the past, the chances of this testimony getting before the jury seem slim.
Throughout the course of the Plantation cops mortgage fraud case the defendants have contended that the lead investigator from the Florida Department of Law Enforcement (FDLE), Dennis Roadruck has been intimidating, threatening and coercing witnesses to get them to say what he needed. That kind of behavior from a cop is hardly in keeping with the "we who labor here seek only the truth" signs that we discussed yesterday. It's always been our opinion when witness testimony is obtained using threats and coercion, the testimony is worthless. This is no different than torturing an innocent person until they finally break and say whatever you want them to in order to stop the torture or as we discussed months ago, MDPD Detective Jorge Baluja scaring a key witness in the Bernardo Barrera mortgage fraud case shitless till she lied and told him exactly what he wanted to hear in order to put his case together.
So here comes FDLE special agent Dennis Roadruck who the defendants accuse of intimidating, threatening and coercing witnesses, shouldn't the jury sitting in judgement of the defendants know that the case was possibly put together with statements and witness testimony that was obtained through these illicit means by the investigator? Also, what if the investigator has a history of such behavior? In the Barrera mortgage fraud case we were able to dig up proof that the lead detective, Jorge Baluja, couldn't tell his ass from his elbow (check this article), if the case had ended up going to trial, don't you think the jury would have been entitled to hear about the detective's history of screwing up cases? I certainly do. So if there existed some sort of proof of Agent Roadruck threatening and intimidating people, wouldn't it be relevant to his credibility and the credibility of the witness statements that he's produced as result of his interviews throughout his investigation? Of course it would be relevant, take a look at these statements chronicling special agent Roadruck's history of domestic violence...
The report documents several instances of assault, battery, stalking, false imprisonment, kidnapping, etc by Agent Roadruck against his estranged wife. Considering the accusations made in that report, does it seem far fetched that special agent Roadruck may have crossed the line when interviewing witnesses in the Plantation cops mortgage fraud case? Of course not. If this is the way you deal with your own family, how can you be expected to deal with total strangers that you're interviewing in a criminal investigation? Surely the jury should know about this kind of a pattern of behavior by the man who built this case, right? I don't think anyone with a modicum of common sense could argue that Mr. Roadruck's history of domestic violence isn't relative to his behavior in the Plantation Cop's mortgage fraud case, that is anyone other than the prosecutors prosecuting the case...
According to that motion, the prosecutors don't want the jury to know about Mr. Roadruck's history, they go so far as to say that the claims of domestic violence are "unproved allegations". Unproven allegations? Mr. Roadruck's ex wife states she has tape recordings of threats from her husband as well as other police reports documenting the abuse, yet according to the prosecutors the allegations "carry a high and unfair level of prejudice to agent Roadruck and the government"! NO SHIT! Of course they do, the prove a long history of what the defendants are alleging, that the investigator who built the case has a history of threatening and intimidating people to get what he wants.
How couldn't this be important for the jury to hear?!What happened to that quest to "seek the truth"? I guess that quest is solely limited to the truths that help the prosecution while anything that helps the defense needs to kept from the jury, truth and justice be damned.
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.
Back in late May we discovered disturbing inaccuracies in the grand jury testimony that eventually led to the Plantation Cops mortgage fraud indictment. From what we were able to find, the government misrepresented several important facts to the grand jury which made an already bad situation for the defendants even worse by including incorrect inflammatory statements like these...
With respect to this particular Indictment, we’re talking about the first count, which is a conspiracy count. It’s a conspiracy to commit mail fraud, wire fraud, and filing of false statement with a Government agency, the Department of Housing & Urban Development.
Counts 2 through 12 are the mail fraud counts. Counts 13 through 25 are the wire fraud counts. Counts 26 through 33 are the 1001 counts, which is the filing of a false statement with a federal agency.
Q. And the department or agency to which the HUD-1 is submitted is the Department of Housing & Urban Development?
A. Yes.
We now know that these statements were false and misleading, the paperwork in question is in fact not submitted to the Department of Housing and Urban Development or any other federal agency. The government responded to the defenses motion to dismiss these charges by basically saying fuck it, let the jury decide...
II. ANY PURPORTED ERROR IS RENDERED HARMLESS BY THE PETIT JURY Any purported errors claimed by the Defendant are rendered harmless if the petit jury convicts the defendant. See United States v. Mechanik, 475 U.S. 66, 72-73 (1986). Based on the aforementioned argument and facts, the counts in the Indictment should stand and the defendant can be tried on the merits. "An indictment returned by a legally constituted and unbiased grand jury, . . . if valid on its face, is enough to call for trial of the charge on the merits." Costello, 350 U.S. at 363.
I was really hoping that Judge Cohn would recognize how serious these "errors" were and would then dismiss the charges in question. Wishful thinking I guess...
According to the judge the defendants "suffered no prejudice from the United States’ alleged misconduct and his constitutional protections were not jeopardized." Wonderful, I'm sure the defendants feel the same way.
Now, back to the City of Miami mess for a moment, our friend Al Crepso broke another story yesterday regarding an alleged bribe that Mayor Regalado offered to embattled police chief Miguel Exposito to resign. According to Mr. Crespo, Regalado offered the Chief $400k to leave, an offer the chief turned down because according to the chief "they couldn’t buy me or my reputation". That's all well and good, but for those who've been paying attention to the rumors surrounding the feud between the mayor and police chief, this $400k buyout thing isn't exactly anything new. Rumors of this alleged buyout have been circulating since early January 2011, from what we've heard the chief turned down the buyout because it would have created too much of a tax liability for him. Regardless of the tax liability or when this "buyout" actually became public knowledge, the question that we're left with is how the hell did the mayor unilaterally decide to give the Chief this offer? Doesn't something like this (especially of this magnitude) require the a vote by the commissioners? Worse still, with the city tetering on the verge of bankruptcy, how can they afford to keep giving away massive severance packages like this? How many murals and led billboards does the city have to put up in order to generate $400K?
The city is on fire folks, the mayor and the police chief publicly feuding, city buildings becoming public billboards, employees showing up part time and taking home over $300k per year, etc. It's going to be interesting to see what's left when this is all over.
I read a story in the Miami Herald on October 7, 2008 regarding a mortgage fraud case that didn't make any sense to me, I did a little digging and what I found left me stunned. A tale of a task force head whose political ambitions have run amuck, a detective without a modicum of common sense, a reporter that prints anything that's put in front of him, the railroading of an attorney by this machine to further the ambitions of its head and the lengths that those involved will go to in order to salvage a case that should have never been. Please take the time to start from the oldest post first and enjoy...
