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February 9, 2010 |
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| December 05, 2007 |
By: Terry Sheridan |
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Mortgage fraud task force chairman Glenn Theobald
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iami-Dade County’s mortgage fraud task force wants to significantly toughen last year’s landmark state law that made the crime a felony, and an amendment is being drafted for the next legislative session.
The legislative effort is expected to be announced this morning at a press conference led by Miami-Dade Mayor Carlos Alvarez. It also will spotlight a fresh round of arrests and a push for a statewide fraud-fighting group.
In Broward County, state attorney Michael Satz conducted the first meeting last week of a fraud task force and County property appraiser Lori Parrish said several investigations have been launched.
As the residential real estate market downturn continues to seek bottom, law enforcement agencies and fraud investigators believe skyrocketing foreclosures could reveal even more mortgage fraud in a state already ranked No. 1 in the country for the crime.
In the wake of the subprime mortgage crisis, rating agencies Standard & Poor’s and Moody’s Investor Services last summer acknowledged the loans backing billions of dollars in securities contained more mortgage fraud than they expected.
Most fraudulent deals involve inflated property values.
Miami-Dade’s proposed changes to Florida’s mortgage fraud law, which took effect Oct. 1, would allow county property appraisers to carve out fraudulent properties from tax assessments to avoid the artificial inflation of values.
The proposed amendment would also make mortgage fraud a second-degree felony punishable by up to 15 years in state prison for deals involving two or more properties or at least $100,000 in fraud.
State law currently makes misrepresentation or omission in the lending process a third-degree felony punishable by up to five years in state prison.
The amendment’s sponsors are task force member Rep. Carlos Lopez-Cantera, R-Miami, a Realtor who served on Gov. Jeb Bush’s property tax reform committee, and Sen. Gwen Margolis, D-Bay Harbor Islands, a sponsor of last year’s legislation.
Lopez-Cantera said the proposal is being drafted into a bill. A draft was not available.
“If we’re No. 1 in fraud in the U.S., then there’s a problem with overvaluation of properties,” said task force chairman Glenn Theobald, legal counsel to the Miami-Dade Police Department. “Everyone’s taxes have gone up because of these knuckleheads doing fraud.”
A condo building known to have 30 to 40 percent of its units involved in phony deals, which almost always involves inflating values to get more money back for the fraudsters, could be carved out of tax rolls.
“Everyone’s just values will be what they should be, and they will pay less taxes,” Theobald said.
He declined to identify specific properties.
But it’s well known among mortgage fraud investigators that several downtown Miami buildings and entire blocks of single-family neighborhoods have been the subject of numerous fraudulent sales.
In Broward, similar situations of suspected fraud have been discovered in certain areas or buildings and property records have been turned over to the Broward State Attorney’s office, Parrish said. She declined to identify the properties.
When told of the Miami-Dade legislative proposal concerning inflated property values, Parrish said her office already reviews sales and removes or disqualifies suspicious deeds and sales from assessment calculations.
“Everyone pays for fraud, and it hurts everybody,” she said.
The office’s sales verification unit tracks average home or condo sizes and values in certain areas or buildings. An especially excessive sale isn’t counted toward market value in that neighborhood, said Ron Cacciatore, director of professional standards and compliance.
The owner will pay property taxes but the purchase price won’t influence tax assessments, said Mac Doyle, supervisor of sales verification and investigations.
Miami-Dade’s proposal is one county property appraisers statewide should already be doing, said Frank Gregoire, a Tampa appraiser and chairman of the Florida Real Estate Appraisal Board.
“Sales that are falsely inflated should not be considered in the market-value approach to appraisals because they aren’t a measure of an informed buyer and seller dealing at arm’s length,” he said.
In Pinellas County, numerous sales have been removed from the county’s appraisal strategy, he said.
Last Friday’s opening session of the Broward fraud task force drew representatives from more than 50 law enforcement and regulatory agencies, and a lender.
The meeting included countywide police agencies, the Florida Department of Law Enforcement, Office of Financial Regulation, U.S. Secret Service, Florida Department of Insurance Fraud, Broward Sheriff’s Office and Bank of America.
“The idea is to bring the investigative bodies together and aggressively attack what fraud we can ferret out,” said task force chairman Al Guttmann, the assistant attorney general overseeing the agency’s economic crime unit.
Miami-Dade’s task force has widened its net to snag more participants in fraudulent deals, including appraisers and title insurance agents.
Sgt. Richard Davis of the Miami-Dade Police economic crimes unit is establishing an appraiser review panel to evaluate suspicious appraisals.
Last summer, U.S. Attorney Alex Acosta, the FBI and other agencies announced the launch of the South Florida Mortgage Fraud Working Group. The group has since announced several federal indictments involving cases in Broward and Miami-Dade counties.
Terry Sheridan can be reached at tsheridan@alm.com or at (954) 468-2614.
Glenn Theobald photo by A.M. Holt
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