Turning the Tables: Using ID Theft and Mortgage Fraud Against the Banks

Submitted by Gator Bradshaw, Esq., Florida Attorney. Raises some interesting causes of action for Mortgage Fraud and ID Theft. Originally lobbied by lenders, this was to protect them from unscrupulous borrowers and conspiracies with mortgage brokers et al. Now it seems they violated the very same laws they fought so hard to get on the books. Most states have a version of this on the books.

The real good ones.

§ 817.54.  Obtaining of mortgage, mortgage note, promissory note, etc., by false representation

Any person who, with intent to defraud, obtains any mortgage, mortgage note, promissory note or other instrument evidencing a debt from any person or obtains the signature of any person to any mortgage, mortgage note, promissory note or other instrument evidencing a debt by color or aid of fraudulent or false representation or pretenses, or obtains the signature of any person to a mortgage, mortgage note, promissory note, or other instrument evidencing a debt, the false making whereof would be punishable as forgery, shall be guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

This one is new from last year.
§ 817.545.  Mortgage fraud

(1) For the purposes of the section, the term “mortgage lending process” means the process through which a person seeks or obtains a residential mortgage loan, including, but not limited to, the solicitation, application or origination, negotiation of terms, third-party provider services, underwriting, signing and closing, and funding of the loan. Documents involved in the mortgage lending process include, but are not limited to, mortgages, deeds, surveys, inspection reports, uniform residential loan applications, or other loan applications; appraisal reports; HUD-1 settlement statements; supporting personal documentation for loan applications such as W-2 forms, verifications of income and employment, credit reports, bank statements, tax returns, and payroll stubs; and any required disclosures.

(2) A person commits the offense of mortgage fraud if, with the intent to defraud, the person knowingly:

(a) Makes any material misstatement, misrepresentation, or omission during the mortgage lending process with the intention that the misstatement, misrepresentation, or omission will be relied on by a mortgage lender, borrower, or any other person or entity involved in the mortgage lending process; however, omissions on a loan application regarding employment, income, or assets for a loan which does not require this information are not considered a material omission for purposes of this subsection.

(b) Uses or facilitates the use of any material misstatement, misrepresentation, or omission during the mortgage lending process with the intention that the material misstatement, misrepresentation, or omission will be relied on by a mortgage lender, borrower, or any other person or entity involved in the mortgage lending process; however, omissions on a loan application regarding employment, income, or assets for a loan which does not require this information are not considered a material omission for purposes of this subsection.

(c) Receives any proceeds or any other funds in connection with the mortgage lending process that the person knew resulted from a violation of paragraph (a) or paragraph (b).

(d) Files or causes to be filed with the clerk of the circuit court for any county of this state a document involved in the mortgage lending process which contains a material misstatement, misrepresentation, or omission.

(3) An offense of mortgage fraud may not be predicated solely upon information lawfully disclosed under federal disclosure laws, regulations, or interpretations related to the mortgage lending process.

(4) For the purpose of venue under this section, any violation of this section is considered to have been committed:

(a) In the county in which the real property is located; or

(b) In any county in which a material act was performed in furtherance of the violation.

(5) Any person who violates subsection (2) commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

This one seems to be more in line with the blog entry.

§ 817.568.  Criminal use of personal identification information

(1) As used in this section, the term:

(a) “Access device” means any card, plate, code, account number, electronic serial number, mobile identification number, personal identification number, or other telecommunications service, equipment, or instrument identifier, or other means of account access that can be used, alone or in conjunction with another access device, to obtain money, goods, services, or any other thing of value, or that can be used to initiate a transfer of funds, other than a transfer originated solely by paper instrument.

(b) “Authorization” means empowerment, permission, or competence to act.

(c) “Harass” means to engage in conduct directed at a specific person that is intended to cause substantial emotional distress to such person and serves no legitimate purpose. “Harass” does not mean to use personal identification information for accepted commercial purposes. The term does not include constitutionally protected conduct such as organized protests or the use of personal identification information for accepted commercial purposes.

(d) “Individual” means a single human being and does not mean a firm, association of individuals, corporation, partnership, joint venture, sole proprietorship, or any other entity.

(e) “Person” means a “person” as defined in s. 1.01(3).

(f) “Personal identification information” means any name or number that may be used, alone or in conjunction with any other information, to identify a specific individual, including any:

1. Name, postal or electronic mail address, telephone number, social security number, date of birth, mother’s maiden name, official state-issued or United States-issued driver’s license or identification number, alien registration number, government passport number, employer or taxpayer identification number, Medicaid or food stamp account number, bank account number, credit or debit card number, or personal identification number or code assigned to the holder of a debit card by the issuer to permit authorized electronic use of such card;

2. Unique biometric data, such as fingerprint, voice print, retina or iris image, or other unique physical representation;

3. Unique electronic identification number, address, or routing code;

4. Medical records;

5. Telecommunication identifying information or access device; or

6. Other number or information that can be used to access a person’s financial resources.

(g) “Counterfeit or fictitious personal identification information” means any counterfeit, fictitious, or fabricated information in the similitude of the data outlined in paragraph (f) that, although not truthful or accurate, would in context lead a reasonably prudent person to credit its truthfulness and accuracy.

(2) (a) Any person who willfully and without authorization fraudulently uses, or possesses with intent to fraudulently use, personal identification information concerning an individual without first obtaining that individual’s consent, commits the offense of fraudulent use of personal identification information, which is a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(b) Any person who willfully and without authorization fraudulently uses personal identification information concerning an individual without first obtaining that individual’s consent commits a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084, if the pecuniary benefit, the value of the services received, the payment sought to be avoided, or the amount of the injury or fraud perpetrated is $ 5,000 or more or if the person fraudulently uses the personal identification information of 10 or more individuals, but fewer than 20 individuals, without their consent. Notwithstanding any other provision of law, the court shall sentence any person convicted of committing the offense described in this paragraph to a mandatory minimum sentence of 3 years’ imprisonment.

(c) Any person who willfully and without authorization fraudulently uses personal identification information concerning an individual without first obtaining that individual’s consent commits a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084, if the pecuniary benefit, the value of the services received, the payment sought to be avoided, or the amount of the injury or fraud perpetrated is $ 50,000 or more or if the person fraudulently uses the personal identification information of 20 or more individuals, but fewer than 30 individuals, without their consent. Notwithstanding any other provision of law, the court shall sentence any person convicted of committing the offense described in this paragraph to a mandatory minimum sentence of 5 years’ imprisonment. If the pecuniary benefit, the value of the services received, the payment sought to be avoided, or the amount of the injury or fraud perpetrated is $ 100,000 or more, or if the person fraudulently uses the personal identification information of 30 or more individuals without their consent, notwithstanding any other provision of law, the court shall sentence any person convicted of committing the offense described in this paragraph to a mandatory minimum sentence of 10 years’ imprisonment.

(3) Neither paragraph (2)(b) nor paragraph (2)(c) prevents a court from imposing a greater sentence of incarceration as authorized by law. If the minimum mandatory terms of imprisonment imposed under paragraph (2)(b) or paragraph (2)(c) exceed the maximum sentences authorized under s. 775.082, s. 775.084, or the Criminal Punishment Code under chapter 921, the mandatory minimum sentence must be imposed. If the mandatory minimum terms of imprisonment under paragraph (2)(b) or paragraph (2)(c) are less than the sentence that could be imposed under s. 775.082, s. 775.084, or the Criminal Punishment Code under chapter 921, the sentence imposed by the court must include the mandatory minimum term of imprisonment as required by paragraph (2)(b) or paragraph (2)(c).

(4) Any person who willfully and without authorization possesses, uses, or attempts to use personal identification information concerning an individual without first obtaining that individual’s consent, and who does so for the purpose of harassing that individual, commits the offense of harassment by use of personal identification information, which is a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.

(5) If an offense prohibited under this section was facilitated or furthered by the use of a public record, as defined in s. 119.011, the offense is reclassified to the next higher degree as follows:

(a) A misdemeanor of the first degree is reclassified as a felony of the third degree.

(b) A felony of the third degree is reclassified as a felony of the second degree.

(c) A felony of the second degree is reclassified as a felony of the first degree.

For purposes of sentencing under chapter 921 and incentive gain-time eligibility under chapter 944, a felony offense that is reclassified under this subsection is ranked one level above the ranking under s. 921.0022 of the felony offense committed, and a misdemeanor offense that is reclassified under this subsection is ranked in level 2 of the offense severity ranking chart in s. 921.0022.

(6) Any person who willfully and without authorization fraudulently uses personal identification information concerning an individual who is less than 18 years of age without first obtaining the consent of that individual or of his or her legal guardian commits a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(7) Any person who is in the relationship of parent or legal guardian, or who otherwise exercises custodial authority over an individual who is less than 18 years of age, who willfully and fraudulently uses personal identification information of that individual commits a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(8) (a) Any person who willfully and fraudulently uses, or possesses with intent to fraudulently use, personal identification information concerning a deceased individual commits the offense of fraudulent use or possession with intent to use personal identification information of a deceased individual, a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(b) Any person who willfully and fraudulently uses personal identification information concerning a deceased individual commits a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084, if the pecuniary benefit, the value of the services received, the payment sought to be avoided, or the amount of injury or fraud perpetrated is $ 5,000 or more, or if the person fraudulently uses the personal identification information of 10 or more but fewer than 20 deceased individuals. Notwithstanding any other provision of law, the court shall sentence any person convicted of committing the offense described in this paragraph to a mandatory minimum sentence of 3 years’ imprisonment.

(c) Any person who willfully and fraudulently uses personal identification information concerning a deceased individual commits the offense of aggravated fraudulent use of the personal identification information of multiple deceased individuals, a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084, if the pecuniary benefit, the value of the services received, the payment sought to be avoided, or the amount of injury or fraud perpetrated is $ 50,000 or more, or if the person fraudulently uses the personal identification information of 20 or more but fewer than 30 deceased individuals. Notwithstanding any other provision of law, the court shall sentence any person convicted of the offense described in this paragraph to a minimum mandatory sentence of 5 years’ imprisonment. If the pecuniary benefit, the value of the services received, the payment sought to be avoided, or the amount of the injury or fraud perpetrated is $ 100,000 or more, or if the person fraudulently uses the personal identification information of 30 or more deceased individuals, notwithstanding any other provision of law, the court shall sentence any person convicted of an offense described in this paragraph to a mandatory minimum sentence of 10 years’ imprisonment.

(9) Any person who willfully and fraudulently creates or uses, or possesses with intent to fraudulently use, counterfeit or fictitious personal identification information concerning a fictitious individual, or concerning a real individual without first obtaining that real individual’s consent, with intent to use such counterfeit or fictitious personal identification information for the purpose of committing or facilitating the commission of a fraud on another person, commits the offense of fraudulent creation or use, or possession with intent to fraudulently use, counterfeit or fictitious personal identification information, a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(10) Any person who commits an offense described in this section and for the purpose of obtaining or using personal identification information misrepresents himself or herself to be a law enforcement officer; an employee or representative of a bank, credit card company, credit counseling company, or credit reporting agency; or any person who wrongfully represents that he or she is seeking to assist the victim with a problem with the victim’s credit history shall have the offense reclassified as follows:

(a) In the case of a misdemeanor, the offense is reclassified as a felony of the third degree.

(b) In the case of a felony of the third degree, the offense is reclassified as a felony of the second degree.

(c) In the case of a felony of the second degree, the offense is reclassified as a felony of the first degree.

(d) In the case of a felony of the first degree or a felony of the first degree punishable by a term of imprisonment not exceeding life, the offense is reclassified as a life felony.

For purposes of sentencing under chapter 921, a felony offense that is reclassified under this subsection is ranked one level above the ranking under s. 921.0022 or s. 921.0023 of the felony offense committed, and a misdemeanor offense that is reclassified under this subsection is ranked in level 2 of the offense severity ranking chart.

(11) The prosecutor may move the sentencing court to reduce or suspend the sentence of any person who is convicted of a violation of this section and who provides substantial assistance in the identification, arrest, or conviction of any of that person’s accomplices, accessories, coconspirators, or principals or of any other person engaged in fraudulent possession or use of personal identification information. The arresting agency shall be given an opportunity to be heard in aggravation or mitigation in reference to any such motion. Upon good cause shown, the motion may be filed and heard in camera. The judge hearing the motion may reduce or suspend the sentence if the judge finds that the defendant rendered such substantial assistance.

(12) This section does not prohibit any lawfully authorized investigative, protective, or intelligence activity of a law enforcement agency of this state or any of its political subdivisions, of any other state or its political subdivisions, or of the Federal Government or its political subdivisions.

(13) (a) In sentencing a defendant convicted of an offense under this section, the court may order that the defendant make restitution under s. 775.089 to any victim of the offense. In addition to the victim’s out-of-pocket costs, restitution may include payment of any other costs, including attorney’s fees incurred by the victim in clearing the victim’s credit history or credit rating, or any costs incurred in connection with any civil or administrative proceeding to satisfy any debt, lien, or other obligation of the victim arising as the result of the actions of the defendant.

(b) The sentencing court may issue such orders as are necessary to correct any public record that contains false information given in violation of this section.

(14) Prosecutions for violations of this section may be brought on behalf of the state by any state attorney or by the statewide prosecutor.

(15) The Legislature finds that, in the absence of evidence to the contrary, the location where a victim gives or fails to give consent to the use of personal identification information is the county where the victim generally resides.

(16) Notwithstanding any other provision of law, venue for the prosecution and trial of violations of this section may be commenced and maintained in any county in which an element of the offense occurred, including the county where the victim generally resides.

(17) A prosecution of an offense prohibited under subsection (2), subsection (6), or subsection (7) must be commenced within 3 years after the offense occurred. However, a prosecution may be commenced within 1 year after discovery of the offense by an aggrieved party, or by a person who has a legal duty to represent the aggrieved party and who is not a party to the offense, if such prosecution is commenced within 5 years after the violation occurred.

817.02.  Obtaining property by false personation

Whoever falsely personates or represents another, and in such assumed character receives any property intended to be delivered to the party so personated, with intent to convert the same to his or her own use, shall be punished as if he or she had been convicted of larceny.

However these statutes will be more applicable.

§ 817.034.  Florida Communications Fraud Act

(1)  LEGISLATIVE INTENT.

(a) The Legislature recognizes that schemes to defraud have proliferated in the United States in recent years and that many operators of schemes to defraud use communications technology to solicit victims and thereby conceal their identities and overcome a victim’s normal resistance to sales pressure by delivering a personalized sales message.

(b) It is the intent of the Legislature to prevent the use of communications technology in furtherance of schemes to defraud by consolidating former statutes concerning schemes to defraud and organized fraud to permit prosecution of these crimes utilizing the legal precedent available under federal mail and wire fraud statutes.

(2)  SHORT TITLE. –This section may be cited as the “Florida Communications Fraud Act.”

(3)  DEFINITIONS. –As used in this section, the term:

(a) “Communicate” means to transmit or transfer or to cause another to transmit or transfer signs, signals, writing, images, sounds, data, or intelligences of any nature in whole or in part by mail, or by wire, radio, electromagnetic, photoelectronic, or photooptical system.

(b) “Obtain” means temporarily or permanently to deprive any person of the right to property or a benefit therefrom, or to appropriate the property to one’s own use or to the use of any other person not entitled thereto.

(c) “Property” means anything of value, and includes:

1. Real property, including things growing on, affixed to, or found in land;

2. Tangible or intangible personal property, including rights, privileges, interests, and claims; and

3. Services.

(d) “Scheme to defraud” means a systematic, ongoing course of conduct with intent to defraud one or more persons, or with intent to obtain property from one or more persons by false or fraudulent pretenses, representations, or promises or willful misrepresentations of a future act.

(e) “Value” means value determined according to any of the following:

1. a. The market value of the property at the time and place of the offense, or, if such cannot be satisfactorily ascertained, the cost of replacement of the property within a reasonable time after the offense.

b. The value of a written instrument that does not have a readily ascertainable market value, in the case of an instrument such as a check, draft, or promissory note, is the amount due or collectible or is, in the case of any other instrument which creates, releases, discharges, or otherwise affects any valuable legal right, privilege, or obligation, the greatest amount of economic loss that the owner of the instrument might reasonably suffer by virtue of the loss of the instrument.

c. The value of a trade secret that does not have a readily ascertainable market value is any reasonable value representing the damage to the owner, suffered by reason of losing an advantage over those who do not know of or use the trade secret.

2. If the value of property cannot be ascertained, the trier of fact may find the value to be not less than a certain amount; if no such minimum value can be ascertained, the value is an amount less than $ 300.

3. Amounts of value of separate properties obtained in one scheme to defraud, whether from the same person or from several persons, shall be aggregated in determining the grade of the offense under paragraph (4)(a).

(4)  OFFENSES.

(a) Any person who engages in a scheme to defraud and obtains property thereby is guilty of organized fraud, punishable as follows:

1. If the amount of property obtained has an aggregate value of $ 50,000 or more, the violator is guilty of a felony of the first degree, punishable as provided in a7%20817.034%5d%5d%3e%3c%2fcite%3e&_butType=4&_butStat=0&_butNum=2&_butInline=1&_butinfo=FLCODE%20775.082&_fmtstr=FULL&docnum=1&_startdoc=1&wchp=dGLbVzW-zSkAB&_md5=14c84468860e32037c64a14f4745b69d” target=_blank rel=nofollow>s. 775.082, 775.083, or s. 775.084.

2. If the amount of property obtained has an aggregate value of $ 20,000 or more, but less than $ 50,000, the violator is guilty of a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

3. If the amount of property obtained has an aggregate value of less than $ 20,000, the violator is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(b) Any person who engages in a scheme to defraud and, in furtherance of that scheme, communicates with any person with intent to obtain property from that person is guilty, for each such act of communication, of communications fraud, punishable as follows:

1. If the value of property obtained or endeavored to be obtained by the communication is valued at $ 300 or more, the violator is guilty of a third degree felony, punishable as set forth in s. 775.082, s. 775.083, or s. 775.084.

2. If the value of the property obtained or endeavored to be obtained by the communication is valued at less than $ 300, the violator is guilty of a misdemeanor of the first degree, punishable as set forth in s. 775.082 or s. 775.083.

(c) Notwithstanding any contrary provisions of law, separate judgments and sentences for organized fraud under paragraph (a) and for each offense of communications fraud under paragraph (b) may be imposed when all such offenses involve the same scheme to defraud.

§ 817.34.  False entries and statements by investment companies offering stock or security for sale

Any person who shall knowingly subscribe to or make or cause to be made, any false statements or false entry in any book of any investment company or exhibit any false paper with the intention of deceiving any person authorized to examine into the affairs of any investment company, or shall make, utter or publish any false statement of the financial condition of any investment company, or the stock, bonds or other securities by it offered for sale, shall be guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

If you like I could condense these into potential FL causes of action. There are others that I look to use under the right circumstances that I can include. I would like to give back to the blog so let me know what you feel would be useful. I could also elaborate on the Civil Remedies for Criminal Practices Act [Fla. Stat. § 772.101 et seq.], that gets you paid if you prove violations of these law.

Gator Bradshaw
gator.bradshaw@yahoo.com

4 Responses

  1. I refinanced january 2007,with New Century Mortgage Corp., which before and right after closing was shut down by the feds. They filed for bankruptcy on April 2007. Mortgage documents named MERS as nominee. I have complained for the first 14 months the loan had the making of predatory actions. The 1st servicer finally listened to my complaints of false information placed on the application by the mortgage broker, to justify the high rate we were given, I suppose. The servicer reduced the rate almost in half. Then transferred the servicing. The next servicer had a habit of imputting charges monthly and payments sent were not fully applied to payments for mortgage. After months of this, I am served with a foreclosure suit by another entity as trustee, ……..pooling and servicing agreement dated….2007HE2.

    In any event, My question is, Is it legal for a servicer, (whom I have had misappropriation of funds problems) with assigns the mortgage as officer of MERS, as VP of the servicing company, to the entity, trustee.

    Is that legal and don’t they have to show perfection of chain of title, since mortgage was securitized???

    Months have gone by and they still have not answered or produced documents, which a motion to compel is pending. What about the proof, authority of the servicer to assign mortgages out???

    Please guide me, thank you.

  2. I ran across this article on livinglies from Sept. 22, 2008. It was sumitted by Gator Bradshaw Esq. Titled: Using ID theft and Morgtage Fraud against the Banks.

    http://livinglies.wordpress.com/2008/09/22/turning-the-tables-using-id-theft-and-mortgage-fraud-against-the-banks/

    It looked like a real find. I don’t think it got enough consideration so I copied the link here. . I was hoping that Mr. Garfield might consider reposting it so it could be parsed.

  3. Mr. Bradshaw,

    I am very interested in getting this broken down into causes of action. Also, can these be pled as affirmative defenses? Correct me if I am wrong, but doesn’t fraud in Florida have to be pled with specificity?

    I also have a question regarding the right to a jury trial in foreclosure cases. As I understand it, if a jury trial is waived in the mortgage contract document, then you cannot have a jury trial. Can you please expand on this? The majority of mortgage contracts contain this clause as a standard clause.

    Also, have you ever heard of a judge stamping the original note canceled and/or paid in full pursuant to the Final Judgment? If the loan is part of a trust, what would be the ramifications to the trust of this type of action on the part of the judge?

    Thanks.
    Alina

  4. THANK YOU MR. BRADSHAW.

    GREAT INFORMATION AND I BELIEVE IT IS A GREAT APROACH.

    NO ONE ASKED ME OR GOT MY PERMISSION TO USE MY PERSONAL INFORMATION IN THIS PONZI SCHEME.

    BUT THEY DID, AND FOR OVER 15,000,000 MORE BORROWERS

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