The FBI convicts a small time operator while the Big Banks continue their Crime Spree unabated

The FBI proudly announces they have convicted a California mortgage rescue operation but pays no attention to the fact that banks are continuing their unabated crime spree that way surpasses a small time mortgage rescue operation.  The government has hard evidence that bank servicers are participating in criminal conduct that includes forging instruments, perjured affidavits, predatory servicing and modification scams and does nothing of impact to address the rampant fraud.

To date no executive calling the shots has gone to prison, further emboldening their illegal behavior.  In fact, most executives who designed the greatest financial fraud scheme the world has ever seen, are promoted or enter government.  Steven Mnuchin perfectly executed the OneWest master crime spree and instead of a stint in federal prison he was promoted to Secretary of Treasury.

The government has sanctioned and fined the banks hundreds of millions of dollars.   The paltry fines have done nothing to curtail their fraudulent behaviors.  A fine of $500 million is simply a tax write-off and a cost of doing business for the big servicers who are collecting billions in profits for foreclosing on loans they can’t prove they own.

At this point, servicing fraud, securitization fraud, foreclosure fraud and modification fraud are considered acceptable operating procedures for the big banks.    The Federal Bureau of Investigation has not done their job and are part of the cover up.  Meanwhile the FBI tries to distract people with stories about saving vulnerable homeowners from small time operators while the guilty go free.

In fact, if you have hard proof of fraud or criminal behavior and report it to the FBI, you will be told that your problem is a civil matter.   If the FBI is interested we would be happy to share dozens of cases where the bank and their counsel forged documents, submitted fraudulent affidavits to the court and foreclosed on homes they didn’t own by resorting to forgery and fraud.  The evidence we have is 100% conclusive and yet no governmental agency has any interest in what the big banks are doing to steal homes.

False Promises

California Man Sentenced for Operating Foreclosure Rescue Scheme

When California homeowners couldn’t make their mortgage payments and faced foreclosures during the Great Recession in 2008, some turned to a Long Beach church pastor for help.

For almost six years, Karl Robinson offered mortgage rescue services under his name and through companies such as Stay in Your Home Today, 21st Century Development, and Genesis Ventures Corporation. Now he’s serving four years in federal prison for his role in a scheme that brought in nearly $3 million in fees from unknowing clients.

Robinson and a group of co-conspirators attracted distressed homeowners with the promise of delaying foreclosures and evictions. They claimed to offer services that connected clients to experienced consultants who could keep them in their homes for an affordable fee.

It was all too good to be true—until an FBI-led investigation in 2013 determined that the mortgage rescue programs were far from legitimate.

“Robinson joined a growing number of con artists surfacing throughout the country during the subprime mortgage crisis focused on lining their own pockets instead of actually helping clients,” said FBI Special Agent Kevin Danford, who investigated the case out of the Bureau’s Los Angeles Field Office.

During the housing crisis, opportunistic groups like Robinson’s preyed on vulnerable and desperate homeowners through common scams such as offering affordable refinancing with lower monthly payments, low-interest deals, and delinquent mortgage pay-offs.

In 2008, Robinson began offering fraudulent foreclosure delay solutions by taking part in what were known as partial-interest bankruptcy scams (see sidebar). The process went on for months, providing Robinson with a steady flow of income as long as his clients were willing to pay.

Another scam delayed evictions for Robinson’s clients whose homes had been sold in foreclosure proceedings. Robinson falsely claimed in state court eviction actions that his clients still had tenants in those homes. Robinson would then file bankruptcies for the fictional tenants, postponing the evictions.

By 2011, clients and lenders were starting to catch on to Robinson’s scams. They turned to their local police, who confirmed the suspected fraud and alerted the FBI.

“Robinson joined a growing number of con artists surfacing throughout the country during the subprime mortgage crisis focused on lining their own pockets instead of actually helping clients.”

Kevin Danford, special agent, FBI Los Angeles

The Bureau opened an investigation on Robinson in August 2013 and subsequently obtained an external hard drive from his home that contained documents such as fake driver’s licenses, false identities, and incomplete bankruptcy petition drafts—which revealed the steps he was using to carry out his fraud scheme.

Following his arrest, Robinson confessed to knowingly defrauding his clients and the state and federal courts. Robinson pleaded guilty in August 2016 to the role he played in running the multi-year foreclosure rescue scheme.

“Robinson was able to delay foreclosure sales for more than 100 properties, and he filed at least 200 bankruptcy petitions,” said Danford. “His scheme not only impacted more than 60 lenders and clogged both federal bankruptcy court and state and local eviction court systems but also caused undue stress to numerous purchasers.”

Partial-Interest Bankruptcy Scams

The scam operator asks you to give a partial interest in your home to one or more persons. You then make mortgage payments to the scam operator in lieu of paying the delinquent mortgage. However, the scam operator does not pay the existing mortgage or seek new financing. Each holder of a partial interest then files bankruptcy, one after another, without your knowledge. The bankruptcy court will issue a “stay” order each time to stop foreclosure temporarily. However, the stay does not excuse you from making payments or from repaying the full amount of your loan. This complicates and delays foreclosure, while allowing the scam operator to maintain a stream of income by collecting payments from you, the victim. (Source: FDIC)

14 Responses

  1. Why can’t the FBI go after fraudulent assignments of mortgages done by some banks? What about the issuance of false securities based on these fraudulent assignments? We have clear proof that our assignment of mortgage is fraud. No help from anyone so far.

  2. From what I recall the FBI does not investigate individual defrauded borrower complaints, it’s the job of the District Attorney. However, if the system worked many corrupt House, Senate, Congress, and judges along with the banksters would be behind bars for falsifying loans.

  3. No one understands. But it has happened dozens of times that federal prosecutors are more comfortable blaming victims than pursuing crimes. They have the indisputable evidence to convict. But some one higher up had said stop.

  4. I would think a federal prosecutor would be interested in such cases… Given the extent… Tied together with a criminal and civil case.. although separate the impact should be great. I just dont understand it…

  5. I filed a complaint against Wells Fargo with the Chicago FBI. No response. They are too busy hunting down small criminals that have no impact on the majority. Banks are “too big to investigate”. That’s why they are fail proof

  6. I moved my accounts to a not-for-profit for profit credit union a long time ago and have fantasized that one morning bankers show up but all our money has been moved. Bet we’d get their attention then!

  7. It’s your charge? How does one go about proceeding. Predatory warnings were heard 17 t0 18 times in house and Senate since early of 2000 (found at the Congressional website). An FBI mortgage fraud warning epidemic was announced from CNN in 2004. How many years did an FBI, agency, or police need to determine whether the actions were criminal or civil? How was a borrower in 2006 forward to go about protecting themselves against mortgage fraud? All any agency had to do was look at the volume of loans per county to determine the odds of them being paid back which we know they had already done, hence financial crisis. Why with all this information was it left to the borrower to get a prosecutor to decide criminal vs civil during the Governments involvement ,interference, with modifications?

  8. @ Sheri,
    In California the public retirement fund ‘ CALPERS’ was a major investor in mortgage back securities. So why invest in a false fraudulent loan deadbeat borrower to save a home when it’s more profitable to foreclose. Plus with trickle down economics, you can bet during the bubble most of Government was flipping houses with ‘liars loans’ until it exploded. The little guy is always last to know.

  9. Why is law enforcement, the courts and gov officials refusing to believe the truth even when it’s well documented.? Can anyone explain who is pulling the strings?

  10. I was always told if the crime is committed against you then its your charge… not the agency or police. Although you then have to get it past the prosecutor… It is not up to FBI or anyone else to tell you the crime is a civil matter. It may be civil but it is also a criminal one….

  11. ” In fact, if you have hard proof of fraud or criminal behavior and report it to the FBI, you will be told that your problem is a civil matter. ”

    Then why is it when the mortgage broker falsifying a loan application with double income to get the loan approved considered a felony? My mortgage broker laughed his ass off calling me a loser for trying to turn him. It’s true from experience, the entire DOJ will do nothing.

  12. Why is it someone does a criminal offense against me I can file charges against that person criminally… But yet we don’t try to file these charges against the bank? We seem to only go thru civil actions against them…

  13. And why is FBI not investigating the real fraud? Why?? Someone can answer??

  14. What would happen if, on a rolling basis, people withdrew the majority of their funds in their account leaving enough in there to keep the account open, and for any automatic withdrawals. Then put the funds back in say 3 days later, then did it again, and again…everyone would do his own according to no schedule. This would take the predictability out of when banks could rely on their floating funds, and in a way force them to keep real money there, and less to invest, AND show that the people do have a very loud voice. It would not be dependent on nay-sayers, they won’t do it. But, if the popular vote is what was reported, there is enough for an unspoken, yet active protest, that appears to be growing in populace.

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