What Happened When the FBI Investigated Foreclosure Fraud in Florida


What Happened When the FBI Investigated Foreclosure Fraud in Florida

By David Dayen

Six years ago, FBI agents in Jacksonville, Florida, wrote a memo to their bosses in Washington, DC, that could have unraveled the largest consumer fraud in American history. It went to the heart of the shady mortgage industry that precipitated the financial crisis, and the case promised to involve nearly every major bank in the country, honing in on the despicable practice of using bogus documents to illegally kick people out of their homes.

But despite impaneling a grand jury, calling in dozens of agents and forensic examiners, doing 75 interviews, issuing hundreds of subpoenas, and reviewing millions of documents, the criminal investigation resulted in just one conviction. And that convict—Lorraine Brown, CEO of the third-party company DocX that facilitated the fraud scheme—was sent to prison for duping the banks.

Thanks to a Freedom of Information Act request, VICE has obtained some 600 pages of documents from the Jacksonville FBI field office showing how agents conducted a sprawling investigation. The documents suggest the feds gained a detailed understanding of how and why the mortgage industry enlisted third-party companies to create false documents they presented to courts, as detailed in the 2012 National Mortgage Settlement, for which the big banks paid billions in civil fines. The banks’ conduct is described in the settlement documents as “unlawful,” and the Jacksonville FBI had it nailed almost two years earlier.

In these case files, you can see the seeds of an alternative history, one where dedicated law enforcement officials take on some of the country’s most powerful financial institutions with criminal prosecutions.

So why didn’t they?

Find out here…

This story expands on David Dayen’s new book Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud, the winner of the Studs and Ida Terkel Prize out this month from The New Press. Follow David Dayen on Twitter.


15 Responses to “What Happened When the FBI Investigated Foreclosure Fraud in Florida”
  1. walter harvey says:

    I am going to the f.b.I. about mortgage fraud my father was 75yrs old could read or write 4loans in 2yrs his note was forged hand writing does match.he was giving a plain note not sign attorney for the plaintiff submitting forged document the the courts.

  2. Henderson says:

    When I took my evidence into the FBI in ‘s. Where I owned my home the agent’ remark was “what does 🙂 have to do With .ca? Had the man read my evidence instead of refusing to view it he would have discovered the companies in .ca were behind the foreclosures and developers who are still involved in the fabrication of foreclosures. My home was set ablaze & 3 bombs went off each time the Sunset Blvd firemen fought to put out the enferno. Then city att. & Abandoned housing stole the land selling the lot to their pals. Lost 4 million in property & destroyed. 18 yrs of my life.
    Still being assaulted & battered by the monster lawyers in Fl.

    • Tom says:

      When are people finally going to take stronger action against the corruption and put an end to it?
      The “We The People” better do something soon or they might as well get in line for the next round of homes being stolen and just give up.

      • Mike Medwitl says:

        Tom WE need to join together and go see Donald Trump . Wells Fargo just stold our 43 unit apartment building in Fort Myers Florida. Had a mod made all my payments on time have return receipts from post office overnighting my payments. These thieves charged me late charges for 20 months when they were all on time and. Forced placed insurance when I had certificates from my insurer for the last 3 years was paying $25,000 a year. This was all induced for me to default. I have the proof and never had due process. All through trickery and deceit . I’m sure there is conspiracy and payoffs (RICO) but who’s going to probe it.The Courts all need to be investigated for not following the Constitutional Law for We The People. Mike

  3. Tom says:

    I lost my home due to massive foreclosure fraud in 2012 and there was nothing to stop it.
    It was a total scam working with the loan modification program, which was just delay tactics until the lawyers and courts could fit you into their schedule to force the foreclosure.
    I had some financial difficulties, but those were resolved. I was working with Chase Bank and they were supposedly working with me to bring my account current. That was blocked in court by the lawyers. I even offered to pay the loan off, which was also blocked.
    I found out later that with FHA and the PMI, the banks made more money forcing the foreclosures where the government guaranteed the banks 80% of the loan amount through the PMI and auctioned the house off later for more profit.
    I was even offered from Chase Bank to do a cash for keys, but the lawyers blocked that too!
    Apparently they got worried that I was figuring out their scam so they did an “IN REM” foreclosure, which is against the property only and not me personally.
    Actually the foreclosure doesn’t even show as ever happening against me.
    During my moving before the foreclosure was finalized, they went in and changed the locks, (WITHOUT A COURT ORDER), and stole over $25,000 of personal property.
    That was reported to the police, but they did nothing!
    Basically, if anyone gets targeted by the corruption, you’ll lose.
    They are above all laws and they make new laws when necessary to cover their scams of theft!
    You can’t win in the corrupt courts!!!

  4. Marilynn Petrella says:

    So United We The People Stand~ Divided We FALL. So I believe that We The People must get UNITED!

    • Tom says:

      At this point the We The People would have to unite in a nationwide strike otherwise nothing will ever change. And that will never happen because as long as other people aren’t affected by the scams, they won’t get involved. They only get involved once it hits them. I read that since the first round of fraudclosures started, there were 7.6 million people affected by it. Now they estimate that 2016 will have another 7.4 million added to it. They got away with it the first time, I guess they’ll do it again. So the banksters get hit with fines, but don’t go to jail. No time for their crimes! Now they just build the fines into their budgets and still make billions. Too big to fail, too big to jail. What a scam on the honest hardworking American citizens!
      Maybe someday people will get the courage to do something to end the insanity caused by the wealthy corrupt money drunks!

  5. Bruce R Nelson says:

    I soooo empathize with the preceding comments. Among other of my personal issues, OCWEN, el gets featured along with my ptsd night terrors. Its like a bad bowl of soup, you eat it only to survive. Its gonna be for you younger folks to shatter the brick wall these criminal corps we believed were honest we protected from harm that the tsunami of agony, pain, suffering and financial l these disgusting money mongers have done to us. At 77 I have limited time to the tunnels end. I never dreamed this journey would end as it seems to have been.

    God Bless you and your dear families. I hurt for you as do I.

    God Bless you and keep you safe

    Bruce R Nelson
    Banner Elk, NC

    • Michelle says:

      Bruce, I feel your pain. Do I ever. Thank you for your words. It’s true the younger generation will hopefully end forever the corruption. My son almost 13 wants to be a lawyer. He was 6 when we were forced out of our home. We stood there in the rain, 7am. At the edge of our once driveway. Behind us was a truck packed with our belongings. The sherif would be there soon to make sure we were out. My son looked up at me and said he didn’t want to leave his room. He asked again as he did for atleast a year after why the ‘bed people’ took our home. That dat in the driveway broke my heart! How dare ‘they’ do this to children.

  6. Bruce R Nelson says:

    Having had my home in Salem, OR stolen from me by HSBC/OCWEN/AHMSI, (all proven to have committed fraud upon me and zillions of other US Citizens, well I can appreciate the FBI disinterest in Florida. I mean if a Federal Court in Oregon failed to see the lawbreakers thumbed noses at TILA then why should the FBI give a tinkers damn? One time I called them from my hospital bed in Oregon and all they would say is “get an attorney and sue them” Of course they were aware that I was a senior (75, disabled) ve but that did not matter that all I have now/then was my ssa. I did sue, pro se in polk County Civil Court first week of jan 2010 and won on TILA law re interest in property and standing. For about a year I was at peace then out from under a rock came my adversaries who convinced Federal Judge Anna Brown that the 3 of then “owned ” the home and without a shred of any evidence on standing, or interest, no proof what so ever, no note, no mortgage, well Brown apparently felt these sad adversaries deserved my home regardless of the fact none had any standing. On top of she she forbade my presence in court and dismissed me pro se with prejudice.

    HSBC continues with its wrongdoings by LAUNDERING SOUTH AMERICAN DRUG CARTEL S COCAINE DRUG MONEY PROFITS, apparently my $300k equity was not enough for the poor downtrodden bank/ must have been so as in some form or fashion HSBC became some sort of financial “partner with Ocwen (because HSBC was named as one of my 3 adversaries. While onm the other hand Qcwen was busy as a beaver in heat committing fraud against zillions of law abiding, trusting US Citizens. My 3rd adversary, AHMSI was also named as my adversary even AFTER the “Vulturist of Wall St, SirWilliam Ross had bailed out of AHMSI which also defrauded me while he still soley owned AHMSI. Oh, yes, Ross hopes to escape liability for his company wrongdoings which is the “under the counter” sale of AHMSI to, well, HELLO, it is Ocwen. These p so far have managed to evade Ocwens penalty of 2 billion “recovery funds” ( well evade, in my case, probably no others, right?) Its going past 2 years since I filed my complaint to CFPD when I learned OCWEN gag me with a batonette, was appointed OMBUDSMAN, by CFPB, something I have never comprehended. More recently I asked CFPB, essentially, “who is policing Ocwen” Two weeks later Ocwen contacts me this past March. Ombudswoman Maria Esquival (Ocwen employee in Clearwater, FLA prosided I would hear something by 3/31. I did “hear” something in yet another direst Ocwen, snidely I now write what that letter said ” Sorry, mr Nelson but we seem tyo have (LOST) all of the documents you submitted over a year ago (it was further back than that) and we need yo to resubmitt all those documents again so we can process your claim” (words to the effect) Lets see, I am 77, broke (because of Ocwen), a disabled vet who survived a recent fir in June last year but had virtually all my files and document destroyed except for a few I salvaged. And here comes my adversary who beat me up in Portland Federal Ct, where I was denied access to argus TILA (a law I doubt Brown had any interest in), here they come, the MASTERS OIF FRAUD AND LOSING PROOF OF ANY INTEREST IN MY HOME, crying to me they “missplaced or lost” my documents and now they have added insult to injury by requesting that I redo the poind or so of fles I sent them by FedEX waaaay back then.

    I really fell sad that these fraudsters seen to loose everything importnat to their (and my) business.

    Now I wish to thank a most generous lady in New Mexico, Ms. Martinez who apparently heard my sad story that I could not afford to buy “CHAIN OF TITLE” due to my poor financial condition. two days ago I received a very un anticipated package from Amazon. I opened it to fin Dayens book, my first concern was an error was made because I could not have ordered this seeming well done treatise on the very subject of my travails( and many others). I was very perplexed until an Amazon receipt slipped out of the book noting, “This is a gift from Marce Martinez, New Mexico. She apparently owns a business “NATURES PRESENCE “I invite any who care to email onmy behalf appreciation for he kind act<marcemar717@gmail.com. As well, my mystery benefactor, the USAF Vet expresses undying appreciation.

    Final comment, How many of you readers have had a successful experience with, ahem, OCWEN? Furthermore how many are aware that the jerk who was CEO of Ocwen, good ole, slap him and us on the back Mr. William Embrey has been "disengaged" and is not longer with Ocwen? I would suspect had any law enforcement agency felt any duty to uphold the law and prosecute OCWEN, good ole Bill might have been the shrinking violet in the witness chair of a Federal Ct. Its amazing that as far as I know none of these crooks have been prosecuted, not just Ocwen but all of them who have gutted this economy in greed and nonchalance. Uhmm, Uhm. Money sure does grease the bad guys accountability slide.

    I thank all of you who suffered through my ongoing diatribe. All I want is my share of that 2 billion money (B4 Ocwen is tempted to make it disappear with all those notes and mortgages the clain they have lost?

    Most Respetfully and to those of us GIs who suffer th stingg of criminal companies. I always pray one of them has the cajones to sue me for libel. As in Queens Bench Twio libel case against the evil nazi dotcor (Anthony Hopkins as I recall), the bad guy "won in his defense, a huge amount even I could afford, one pence or a farthing as I recall. At my age thats digging deep into a past memory..

    Love, Peace and good fortune to all of you

    Bruce R Nelson
    Banner Elk, NC

  7. Kim says:

    It’s been 8 years and the trauma of losing my home of fifteen years still hurts. I must force myself to read this information.

    • Michelle says:

      Kim, I’m so sorry, I understand. I too lost my home in 2009, it also affected my child which is the worst of all. I stopped reading but started up again. I don’t know if it will ever stop hurting…

    • mkd says:

      I lost my home of 13 years in 2010 and after 6 years you would think that my family and I would have “gotten over it and moved on”–comment from family and friends. Yes the pain is still there cause I know that my home was taken through fraudulent documents. As with my home, millions of people’s homes were STOLEN. There is no other way to say it. None of us will ever get justice cause the plan all along was to take the deeds. The banks continue their illegal foreclosures because the people who are supposed to be watching this activity can’t or will not do anything or bring charges. So many destroyed families and lives. How do these people ever sleep at night or look at their children and not feel guilty to what they have done to all the homeless children? They could care less because they are morally bankrupt, have black hearts and have sold their souls to the devil.

      • Michelle says:

        You could not of said that any better! Your 100 percent spot on! I too wonder how they can live with themselves.
        Could be a bunch of Narcissistic Sociopaths. How else could they tear apart the lives of the American people? Force a 90 year old woman to attempt suicide, or husband/wife murder/suicide. Force so many onto the streets without credit to rent an apartment. They are sick people!

      • Kent says:

        I have fought Chase for seven years and this last October the law firm that had been handling their case was bought out. Within 2 weeks the new law firm has notified my attorney that the bank took a voluntary dismissal. I guess they are waiting on the Florida Supreme Court ruling now on statue of limitations. My question is there a time limit for them to refile. I had heard one year. Does anyone know if it’s true ?

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