20 From South Florida Charged in $40 Million Mortgage Fraud Scam

Twenty people from the Miami area have been charged in an alleged mortgage fraud scam that includes real estate and banking professionals, The Miami Herald reports.

Prosecutors are at it again. They keep bringing these mortgage fraud cases in Miami that have little evidence to prove fraud. In many cases, the suspects are simply bankers or real estate professionals — agents, title companies and others who are part of the real estate process — who were doing their jobs. Someone lost money, however, and all of a sudden it’s “fraud.”

Federal prosecutors go out of their way to promote the fact that they secured an indictment — a one-sided hearing where prosecutors bring evidence and testimony to a panel of grand jurors who rarely decline the government’s request for an indictment. And they blast press releases and hold news conferences to show the public how much they’re doing to combat the so-called problem.

In many cases, an experienced Miami criminal defense attorney steps in and helps a defendant beat the charges, which gets much less fanfare. It’s the nature of the beast and may seem unfair. But justice doesn’t always get the media’s attention as does the announcement of the initial hyped-up charges.

In this case, 20 people are accused of participating in a scheme from 2006 to 2008 in which real estate professionals allegedly falsified loan documents and obtained 200 home equity lines of credit loans.

Prosecutors allege that a brother and sister team from Miami obtained loans for homes and condos with the help of a bank manager. They and others allegedly falsified borrowers’ income levels, assets, employment and other information needed to get the loans approved.

A title agent allegedly helped in the scam by disbursing millions in loan proceeds to co-conspirators. All 20 are charged with conspiracy to commit bank fraud and mortgage fraud charges. Each defendant faces up to 30 years in prison on each count.

What the article doesn’t lay out is the proof prosecutors intend to use to try to turn a simple indictment into a conviction. These real estate cases are very complex and while all the terms used — falsifying loan applications, sending out millions of dollars, etc. — seems very impressive and criminally minded, the facts sometimes aren’t as they seem.

What may end up coming out once the case goes to trial is that the government really doesn’t have solid proof that all of these people knowingly committed any crime. Proving that all these people all worked together on a large-scale plan to rip off banks is quite an undertaking.

What may end up happening is a few of the lower-level offenders making plea agreements — the government likely desperately needs this to happen — to testify against the others. Still, it would be uncommon for all these people to know each other or have knowledge about what they allegedly did as part of this crime. Even flipping co-defendants into witnesses has its limitations.

An experienced Miami white-collar crimes attorney must be brought in to assess all the facts and question the government’s evidence and witnesses. These cases must be clearly explained to jurors, which can be challenging. And often, the government’s facts are so convoluted a jury can’t convict.