MIAMI (CBS4) – Federal investigators say it’s a crime that is exceeded only by Medicare fraud in South Florida.
Mortgage fraud. It’s a growing crime that federal prosecutors now say costs taxpayers, legitimate homeowners and banks billions of dollars every year.
The fraud has become so bad that experts say it has driven up the cost of any loans you might need.
And the new procedures being adopted to try to prevent the fraud are now making home ownership for legitimate buyers more difficult.
CBS4 I-Team investigator Stephen Stock spent the last five months going behind the scenes of federal investigators’ efforts to stop what’s become the next hot criminal scheme to steal your money.
To the untrained eye, the list of properties looks like a South Florida real estate agents dream property listing sheet.
They are homes and properties in some of the nicest areas across South Florida. The properties even include some in the Naples and Orlando areas
But federal prosecutors say the properties aren’t a real estate agent’s sale list but the product of a vast mortgage fraud conspiracy that took advantage of new immigrants coming to South Florida from Haiti.
CBS4 I-Team investigator Stephen Stock confronted one of the two people charged with perpetuating the conspiracy, Yolette Antoine, in downtown Miami.
Stock asked Antoine “Ms. Antoine, can we speak to you? Did you know what you did was wrong? Did you know you stole?”
“I have nothing to say,” replied Yolette Antoine.
But US Attorney Wifredo Ferrer of the Southern District of Florida had plenty to say about Antoine’s scheme as well as dozens of other mortgage fraud schemes his office has busted during the last four years.
“What did these two defendants do (according to US District Court records)? They stole their identities,” said Ferrer.
It was, according to US Attorney Ferrer, an especially egregious example of the worst of dozens of mortgage fraud cases lately in South Florida.
“What they these two defendants did was they purported to be investment managers or brokers but
(they went) on the (local) radio stations,” said Ferrer.
“They (the mortgage fraud defendants) were going to the Haitian-American community and asking them to come forward to (ostensibly) to help them on immigration problems,” said Ferrer. “(The defendants were posing as people to show immigrants) how to get government services as they (the immigrants) were on their way to become citizens.”
Instead, according to federal court documents Yolette Antoine and a codefendant named Constance Powell used an elaborate mortgage fraud scheme to take the immigrants’ identities, including their social security numbers, their addresses, their phone numbers and other personal information. The court documents charge that Antoine and Powell then used that stolen information to convince banks to loan them more than 4 millions of dollars in fraudulent mortgages.
The US Court documents charged that those mortgages were then used to buy the properties all over the state of Florida.
“And then they (Antoine and Powell) flipped the properties without these poor Haitian-American victims knowing,” said Ferrer. “And then the defendants had their relatives live in the property until the property either foreclosed or they were able to flip (sell) it.”
I-Team investigator Stephen Stock tried to ask Antoine about all this.
“You didn’t do a conspiracy with Constance Powell?” asked Stock.
“No,” said Yolette Antoine.
Powell has pleaded innocent to the charges and is due to go to trial on these charges in April. She could not be reached for comment on this case.
Despite Antoine’s protestations, just moments before the I-Team confronted her, she had been sentenced to 75 months in prison after she pleaded guilty to some of the very charges she claimed not to know anything about. Court records show Antoine pleaded guilty in US District Court to one count of conspiracy to commit wire and mail fraud and one count of aggravated identity theft.
Click here to read the guilty plea and the court’s factual proffer to the charges.
“Did you take advantage of those people and buy land?” asked I-Team investigator Stock.
“What people?” asked Antoine.
“Your people. Haitians,” said Stock “Did you steal from them, creating mortgage fraud right?”
“I wasn’t the mortgage broker. I didn’t do the mortgages,” said Antoine.
Again, Antoine’s alleged co-conspirator, Constance Powell, has pleaded not guilty to the charges against her and court records show she is scheduled to go to trial on the charges later in April, 2011.
“Mortgage fraud is a crime of opportunity and when you open that door someone will walk in,” said US Attorney Ferrer.
The Southern District’s US Attorney holds the Antoine case up as just one example out of hundreds of mortgage fraud cases his office has pursued in the last four years.
“The number of cases the volume of the fraud is now through the roof,” said Ferrer.
The problem has become so bad, so pervasive in South Florida, that federal investigators and prosecutors set up a special mortgage fraud task force in 2007 to do nothing but pursue cases like these.
Since the task force started, the US Attorney’s office has charged 401 different people accused of committing nearly a half billion dollars in mortgage fraud in the Miami area alone.
“We are targeting folks from straw buyers who pretend or purport to be buyers who have no intention of living in the property or pay the mortgage, all the way through the broker, title agent, attorneys (and) loan officers,” said Ferrer.
Then there are the heart-breaking cases of mortgage fraud victims such as the case of Annie Edwards.
“I couldn’t believe it,” said Edwards as she recalled the day she learned she had been victimized.
“We own the place free and clear,” Edwards said of her ramshackle place in north Miami where she’s lived for nearly 30 years.
To call the home in need of repair would be a generous description. In many places it is almost falling apart.
That’s why Edwards was stunned to receive a notice from a bank she’d never heard of telling her she had defaulted on a $102,000 home loan she’d never signed.
Again, the loan was taken out against a house that is worth less than $40,000.
“I just couldn’t believe it,” said Edwards.
According to Edward’s lawyer, evidence shows that a step-relative signed out a mortgage against her home without her knowledge.
“Here Annie Edwards sits thinking her house is in jeopardy,” said attorney Jonathan A. Heller.
And Heller said that the bank gave out the loan without sending anyone to Edward’s property to see the home for an official, on-site appraisal.
“I didn’t know what to do,” said Edwards when she got the bank’s default notice.
In fact, Edwards would have lost her home but Heller stepped in to help at the last minute.
“The first notification that Annie Edwards, who as you know is confined to a wheelchair knew anything about a mortgage, let alone a mortgage in default, was when she got a notice in from the bank saying she owed $105,000,” said Heller. “And (the notice said) if she didn’t pay they (the bank) were going to take her house over.”
“It (the home) was worth 30 or 40 thousand dollars,” said Edwards. “I saw this letter saying that the loan was $105,000 and I said this was unbelievable.”
Click here to read Edward’s civil suit that contains these allegations.
“She knew nothing about this loan,” said Heller. “She didn’t receive any of the money.”
Heller took Edwards’ case on for free on the day when she and her family appeared in court as the bank attempted to convince a judge to declare her in default and throw her out of the only home she’s known for more than three decades.
“This case presents the very worse of not only mortgage fraud in South Florida but just excess of irresponsible lending practices,” said Heller. “This case involved forged deeds, a mortgage based on false facts.”
“The loan application is rife with false representations. The appraisal is filled with problems,” said Heller. “First of all, appraising this house at $120,000 when it could not have been (worth) more than $30,000. And we’re talking sticks and stones, because you’d never find a buyer for this property.”
“Up until right now I really don’t know what’s going to happen,” said Edwards.
Even now, four years after the bank tried to throw her out, Annie Edwards still isn’t sure what her future holds.
“I’m on a fixed income,” said Edwards. (If they take the home) “I won’t have anything. They could still kick me and family out.
“I have nowhere to go,” said Edwards. “Nowhere to go.”
“We need to prevent this type of crime,” said US Attorney Wifredo Ferrer.
Ferrer said it’s these types of cases that drive his office to continue to pursue this fraud despite the fact it never seems to end.
“When you boil it down it’s all about fraudulent statements,” said Ferrer. “It’s about misrepresentation. It’s about lies and it’s our job to catch people in their lies.”
The I-Team talked with a half dozen other mortgage fraud victims. All of the other victims declined to go on camera because of embarrassment or worry that they could be victimized again.