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ROBO-SIGNING: MAIL FRAUD AND WIRE FRAUD
Lots of people have discussed RICO as a basis for suing on a private right to damages resulting from all the fraudulent acts committed by the entire string of “securitization” participants. The focus of such a lawsuit should be, in my opinion, mail fraud and wire fraud, which is exactly what happened. If the loan, collection or foreclosure included fraudulent affidavits, or other forged or fabricated documents designed to deprive one or more persons of money or property or even valuable rights, then there is BOTH criminal and civil liability for MAIL FRAUD and WIRE FRAUD under RICO. Many states have similar statutes of their own with private right of action affirmed by the Supreme Court of that state, like North Carolina.
These treble damage rights exist and are far easier to prove than many lawyers would have you believe.
“while the RICO plaintiff may need to show “that someone relied on the defendant’s misrepresentations” in order to satisfy the causation element of a civil RICO claim, under appropriate facts “third-party reliance” can suffice for that purpose. Bridge reconfirmed the need to show a proximate causal link between the alleged mail fraud and the plaintiff’s claimed injuries but rejected the suggestion that this requirement could only be met by showing that the plaintiff had relied on fraudulent misrepresentations in the underlying mailing.” — Robert A Schwinger — see Schwinger NYLJ RICO-WIRE FRAUD-MAILFRAUD DAMAGES TO PRIVATE LITIGANTS
EDITOR’S NOTE: This has always been a powerful remedy on which the government and some lawyers have relied to achieve justice by scam artists who think they are one step ahead of the law — like the pretender lenders. If you look at the delivery of documents and movement of money, you will see that the pretenders faked the identity of the lender, faked the terms of the loans, and then filed false documents for the purpose of stealing a home in a fake foreclosure.
In Bridge v. Phoenix Bond & Indemnity Co., the Supreme Court of the Untied States concluded, “a person can be injured ‘by reason of’ a pattern of mail fraud even if he has not relied on any misrepresentations.” It cited the allegations of Bridge as a “a case in point,” holding that under those alleged facts “respondents clearly were injured by petitioners’ scheme.”
It appears as though you can even claim bank fraud and then get your own damages, if you prove the damages, which should not be too difficult.
For example, the satisfaction of mortgage. In the case of securitized claims on mortgages in which the transfers never occurred, the title has been clouded and the original mortgage, if it ever actually was perfected. The loan was allegedly subject to a satisfaction of mortgage or reconveyance executed by (a) an unauthorized and disinterested party who received the payoff amount even though they had no claim to it and (b) based upon false representations, affidavits and claims as we discussed ad nauseum on the pages of this blog. By my count there were at least 60 million such transactions on refinancing of the property or re-sale.
Because the definitions are broad under these Federal Statutes, getting behind the corporate veils and levels of plausible denial is easier under these rights of action. And because the the accompanying risk of criminal prosecution, you might find more people stepping forward to protect themselves and “Spill the beans.” Perhaps a few private actions under RICO for WIRE FRAUD and MAIL FRAUD might prompt the Department of Justice to get off its backside and bring claims against the entire chain of securitization participants.
There are actually attorneys who specialize in this area of the law. Bringing them up to speed on the whole fact pattern here will give them a Greek diner’s menu of dozens of points in the mortgage origination process, the mortgage funding process, and the foreclosure process in which mail fraud and wire fraud were committed. There is also the possibility of gaining an injunction because the fraud is on-going.
Since most states have their own version of RICO, you have the possibility of keeping the action in state court or at your election going into Federal court. The actions can be brought in adversarial proceedings in bankruptcy, and potentially a counterclaim in unlawful detainer and eviction, depending upon state law.
Try it — you’ll like it.
Title 18 of the United States Code, Chapter 63
Mail fraud is an offense under United States federal law, which includes any scheme that attempts to unlawfully obtain money or valuables in which the postal system is used at any point in the commission of a criminal offense. Mail fraud is covered by Title 18 of the United States Code, Chapter 63. As in the case of wire fraud, this statute is often used as a basis for a separate federal prosecution of what would otherwise have been only a violation of a state law. “Mail fraud” is a term of art referring to a specific statutory crime in the United States of America. In countries with nonfederal legal systems the concept of mail fraud is irrelevant: the activities are likely to be crimes there, but the fact that they are carried out by mail makes no difference as to which authority may prosecute or as to the penalties which may be imposed. In the 1960s and ’70s, inspectors under regional chief postal inspectors such as Martin McGee, known as “Mr. Mail Fraud,” exposed and prosecuted numerous swindles involving land sales, phony advertising practices, insurance ripoffs and fraudulent charitable organizations using mail fraud charges. — Wikipedia
18 U.S.C. 1341: Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
§ 1342. Fictitious name or address
Whoever, for the purpose of conducting, promoting, or carrying on by means of the Postal Service, any scheme or device mentioned in section
1341 of this title or any other unlawful business, uses or assumes, or requests to be addressed by, any fictitious, false, or assumed title, name, or address or name other than his own proper name, or takes or receives from any post office or authorized depository of mail matter, any letter, postal card, package, or other mail matter addressed to any such fictitious, false, or assumed title, name, or address, or name other than his own proper name, shall be fined under this title or imprisoned not more than five years, or both.
Whoever knowingly executes, or attempts to execute, a scheme or artifice—
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises;
shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
Chapters 1-10
- Chapter 1: General Provisions
- This chapter consists of General Provisions. §1 is repealed. §2 defines principals. §3 defines and provides punishment for accessory after the fact, while §4 defines and provides punishment for misprision of felony. §5 defines “United States,” §6 defines “department” and “agency,” §7 defines “special maritime and territorial jurisdiction of the United States,” §8 defines “obligation or other security of the United States,” §9 defines “vessel of the United States,” §10 defines “interstate commerce” and “foreign commerce,” §11 defines foreign government, and §12 defines “United States Postal Service.” §13 deals with laws of states adopted for areas within federal jurisdiction. §14 is repealed. §15 defines “obligation or other security of foreign government” and §16 defines “Crime of violence.”
- §17 deals with the insanity defense, defining it as “an affirmative defense to a prosecution under any Federal statute that, at the time of the commission of the acts constituting the offense, the defendant, as a result of a severe mental disease or defect, was unable to appreciate the nature and quality or the wrongfulness of his acts,” that “mental disease or defect does not otherwise constitute a defense,” and that “the defendant has the burden of proving the defense of insanity by clear and convincing evidence.”
- §18 defines “organization,” §19 defines “petty offense,” §20 defines “financial institution,” §21 defines “stolen or counterfeit nature of property for certain crimes,” § 23.1 defines “court of the United States.” §24 provides “definitions relating to Federal health care offense.” §25 deals with the “use of minors in crimes of violence.”
- The crime of wire fraud is codified at 18 U.S.C. § 1343
Wire fraud, in the United States Code, is any criminally fraudulent activity that has been determined to have involved electronic communications of any kind, at any phase of the event. The involvement of electronic communications adds to the severity of the penalty, so that it is greater than the penalty for fraud that is otherwise identical except for the non-involvement of electronic communications. As in the case of mail fraud, the federal statute is often used as a basis for a separate, federal prosecution of what would otherwise have been a violation only of a state law.
The crime of wire fraud is codified at 18 U.S.C. § 1343, and reads as follows:
- Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
In the case of United States v. LaMacchia (1994; text of opinion), a student of the Massachusetts Institute of Technology was charged with wire fraud when, because he had not profitted personally from online distribution of millions of dollars’ worth of illegally copied software, he could not be charged with criminal copyright infringement. The United States District Court, District of Massachusetts, dismissed the charges, noting they were an attempt to find a broad federal crime where the more narrowly defined one had not occurred. Congress then amended the copyright law to limit further use of this loophole.
According to Neder v. United States (527 U.S. 1, 23, decided in 1999), the alleged misrepresentation to support a conviction under 18 U.S.C. § 1343 must be a material misrepresentation; a misrepresentation is material if it is capable of influencing, or has a “natural tendency” of influencing.
To commit wire fraud, one must (1) devise, or intend to devise, a scheme or artifice to defraud another person on the basis of a material representation, and (2) do it with the intent to defraud, and (3) do it through the use of interstate wire facilities (i.e. telecommunications of any kind).
See 8th Circuit Pattern Criminal Jury Instructions, 242 & 250.
If a fourth element—that the alleged victim is a financial institution—also is present, the penalty is enhanced as provided in the statute.
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Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: 18 U.S.C. § 1343, bankruptcy, borrower, Bridge v. Phoenix Bond & Indemnity Co.2, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, mail fraud, modification, quiet title, rescission, RESPA, securitization, TILA audit, Title 18 of the United States Code, trustee, WEISBAND, wire fraud | 31 Comments »
Some saw this coming in the last few weeks. Now all HELL is about to Break Loose.