DELAWARE TO MERS: NOT IN OUR STATE!

MOST POPULAR ARTICLES

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

Delaware sues MERS, claims mortgage deception

Posted on Stop Foreclosure Fraud

Posted on27 October 2011.

Delaware sues MERS, claims mortgage deceptionSome saw this coming in the last few weeks. Now all HELL is about to Break Loose.

This is one of the States I mentioned MERS has to watch…why? Because the “Co.” originated here & under Laws of Delaware…following? [see below].

Also look at the date this TM patent below was signed 3-4 years after MERS’ 1999 date via VP W. Hultman’s secretary Kathy McKnight [PDF link to depo pages 29-39].

New York…next!

Delaware Online-

Delaware joined what is becoming a growing legal battle against the mortgage industry today, charging in a Chancery Court suit that consumers facing foreclosure were purposely misled and deceived by the company that supposedly kept track of their loans’ ownership.

By operating a shadowy and frequently inaccurate private database that obscured the mortgages’ true owners, Merscorp made it difficult for hundreds of Delaware homeowners to fight foreclosure actions in court or negotiate new terms on their loans, the suit filed by the Attorney General’s Office said.

[DELAWARE ONLINE]

Related posts:

  1. New York Working With Delaware on Criminal Foreclosure Inquiry via Bloomberg- New York Attorney General Eric Schneiderman said he…
  2. AG Beau Biden Discusses His Fight to Investigate the Banks, MERS on The Dylan Ratigan Show [VIDEO] Beau Biden, Attorney General for the State of Delaware, has…
  3. A Fire Sale for Arsonists: The “Revised” Bank Mortgage Settlement Still Stinks Excellent piece by Richard (RJ) Eskow HuffPO- Imagine that a…
  4. Foreclosure deal near as banks win more immunity It’s official now and it’s very clear that the AG’s…
  5. California Takes the Bait, Is Wooed In Foreclosure Fraud Settlement Talks People NEED JOBS ..!! I don’t care if you refi…


MAIL FRAUD AND WIRE FRAUD, CHAPTER 18, USC AS A BASIS FOR DAMAGES AGAINST THE BANKS

MOST POPULAR ARTICLES

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

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.

§ 1344. Bank fraud

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.

Wire Fraud, Mail Fraud? Possible Cause of Action Against Pretenders and Attorneys

Editor’s Comment: This reminds me of the end of Grisholm’s Book “The firm”. It’s not sexy but it has lots of teeth. The quote below is from Wikipedia. I was talking to an old friend of mine about the securitization scam which continues as an on-going process, first in the form of “closing” alleged loans and now in the form of foreclosures. It seems that the use of electronic media sent through the internet, like spreadsheets with misinformation on it, and which is part of a scheme wherein money is wired and illicit profits are earned, may be a crime and a cause of action for private individuals.

My friend, who shall remain anonymous, basically puts it this way. This is an oversimplification of the way he analyzed it. Money is wired into a “pool account.” That came from “investors. Then money is wired into an escrow account which in turn is wired into the accounts of third parties to close the transaction. Sometimes some of the wire proceeds are converted to checks. The procedure is perfectly legal unless the purpose of the or goal of the transaction was illegal, and more specifically fraudulent. The diversion of funds that were wired into undisclosed accounts for undisclosed parties in transactions that were misrepresented on the facts (appraisal fraud on the property and ratings fraud on the securities) makes the deal susceptible to wire fraud allegations.

Since we have now determined that at the time of “sale”of the “loan product” to the “borrower” the actual transaction papers were rarely if ever transmitted to anyone, and since we have now determined that the general practice was to send electronic spreadsheets with loan data on it which substantially misrepresented the content of the actual transactions, and since we we have determined that the ratings were at least wrong and probably fraudulent, the scheme fits neatly into the wire fraud and mail fraud infrastructure. If that is the case, there is a rather mundane cause of action with a lot of teeth in it which could bring the investment bankers and all their affiliates to task. You see, says my friend, they not only did it to each other, the borrowers and the investors, but they employed the same means with the Federal government when they took TARP money, went to the Fed window and participated in other Federal programs. In his opinion, this is a far simpler case to make than securities fraud or predatory lending.

Mail fraud is an offense under United States federal law, which refers to any scheme which 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 listed below 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[1][2]

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 that is capable of influencing, or has a “natural tendency” of influencing, a decision is material.

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.

TBW Taylor Bean Chairman Arrested On Fraud Charges

“The fraud here is truly stunning in its scale and complexity,” said Lanny A. Breuer, assistant attorney general in the criminal division of the Department of Justice. “These charges send a strong message to corporations and corporate executives alike that financial fraud will be found, and it will be prosecuted.”

Once they determined that that approach might be difficult to conceal, they started selling mortgage pools and other assets to Colonial Bank that they knew to be worthless, officials said. Mr. Farkas and his partners relied on this technique to sell more than $1 billion of fraudulent assets over the course of several years, even covering up the fraud by recycling old fake assets for new ones, according to the complaints.

Editor’s Note: TBW has been high on my list of incompetent fraudsters. I always thought it was a stupid risk to “sell” mortgages and “sell” the servicing rights (probably to their own entity), and then take the servicing back. Stupid maybe, but they had no choice. The entire Taylor Bean operation wreaks of fraud and inconsistencies.

Bottom Line: If you have a TBW as the originating “lender” this article indicates, as we have known all along, that they were using OPM (Other People’s Money) and they were NOT the lender even though they said they were. It is highly likely that few, if any, of the loans were actually “securitized” because the loans were either nonexistent as described, never accepted by any pool (even though there might be a pool out there that claims ownership) and that none of the assignments were ever completed.

Thus your claims against TBW (including appraisal fraud, predatory loan practices, deceptive loan practices, fraud etc.) are properly directed, to wit: TBW still owns the paper, although the obligation is subject to an equitable unsecured claim from investors who funded the loan.

June 16, 2010

Executive Charged in TARP Scheme

By ERIC DASH

Federal prosecutors on Wednesday accused the former chairman of Taylor, Bean & Whitaker, once one of the nation’s largest mortgage lenders, of masterminding a fraud scheme that cheated investors and the federal government out of billions of dollars and led to last year’s sudden failure of Colonial Bank.

The executive, Lee B. Farkas, was arrested late Tuesday in Ocala, Fla., after a federal grand jury in Virginia indicted him on 16 counts of conspiracy, bank fraud, wire fraud and securities fraud. Separately, the Securities and Exchange Commission brought civil fraud charges against Mr. Farkas in a lawsuit filed on Wednesday.

Prosecutors said the fraud would be one of the biggest and most complex to come out of the housing collapse and the government’s huge bailout of the banking industry. In essence, they described an elaborate shell game that involved covering up the lender’s losses by creating fake mortgages and passing them along to private investors and government agencies.

Federal officials became suspicious after Colonial BancGroup, the main source of financing for Mr. Farkas’s company, tried to obtain $553 million in bailout money from the Troubled Asset Relief Program. The TARP application, filed in early 2009, was contingent on the bank first raising $300 million from private investors.

According to the S.E.C. complaint, Mr. Farkas and his partners said they would contribute $150 million, two private equity firms would each contribute $50 million, and a “friends and family” investor group would contribute another $50 million. “In truth, neither of the $50 million investors were private equity investors and neither ever agreed to participate,” the complaint said.

Mr. Farkas pocketed at least $20 million from the fraud, which he used to finance a private jet and a lavish lifestyle that included five homes and a collection of vintage cars, prosecutors said.

But the case is likely to expand beyond Mr. Farkas. The complaints cite the involvement of an unnamed Colonial Bank executive and other co-conspirators in the suspected fraud, and prosecutors said they might hold others accountable down the road.

“The fraud here is truly stunning in its scale and complexity,” said Lanny A. Breuer, assistant attorney general in the criminal division of the Department of Justice. “These charges send a strong message to corporations and corporate executives alike that financial fraud will be found, and it will be prosecuted.”

Officials said the many layers of the scheme resulted in more than $1.9 billion of losses to investors; a $3 billion loss to the Department of Housing and Urban Development, which guaranteed many of the loans that Mr. Farkas’s company sold; and a $3.6 billion hit to the Federal Deposit Insurance Corporation, which had to take over Colonial Bank and pay its depositors after many of the bank’s assets were found to be worthless.

The complaints also list BNP Paribas and Deutsche Bank, which provided financing to Mr. Farkas’s company, as victims of the suspected fraud. Together, they lost $1.5 billion.

According to the complaints, the fraud started as early as 2002 with an effort to conceal rising operating losses at Taylor, Bean & Whitaker, a mortgage lender founded by Mr. Farkas. The first stage involved an attempt to hide overdrafts on a credit line the company had with Colonial Bank. As those overdrafts grew, prosecutors contend, Mr. Farkas and his associates started selling fake mortgage assets to Colonial Bank in exchange for tens of millions of dollars.

Once they determined that that approach might be difficult to conceal, they started selling mortgage pools and other assets to Colonial Bank that they knew to be worthless, officials said. Mr. Farkas and his partners relied on this technique to sell more than $1 billion of fraudulent assets over the course of several years, even covering up the fraud by recycling old fake assets for new ones, according to the complaints.

The transactions were “designed to give the false appearance that the loans were being sold into the secondary mortgage market,” Mr. Breuer said. “In fact, they were not.”

By 2008, prosecutors contend, the scheme had entangled the federal government. Investigators in the Office of the Special Inspector General for TARP took notice of the size of Colonial Bank’s bailout application and became suspicious of the accuracy of the bank’s statements.

That led investigators to alert other federal officials and draw a connection between Colonial Bank and Taylor, Bean & Whitaker, whose offices were raided by federal agents in August 2009. Both companies would soon stop operating.

“We knew it was a longstanding and close relationship between Colonial and T.B.W., and we decided that we needed to take a much closer look,” Neil M. Barofsky, the TARP special inspector general, said at a news conference on Wednesday. Investigators also discussed the situation with Treasury officials to “make sure the money would not go out the door.”

Federal officials have conducted nearly 80 criminal and civil investigations into companies that accepted TARP money, but so far they have filed charges in only one other case. In March, the head of Park Avenue Bank in Manhattan was accused of trying to defraud the government bailout program.

%d bloggers like this: