Wednesday, July 18, 2012

Feds Pinch Home Inspector In Alleged F'closure Service Report Fraud; Freddie, Fannie Among Unwitting Dupes Snookered Into Footing BofA-Authorized Tab

In Tampa, Florida, The Tampa Tribune reports:

  • As the real estate market plunged in Florida, a Brooksville company that inspected foreclosed homes had trouble keeping up with the work. American Mortgage Field Services was contracted by Bank of America to perform upward of 100,000 inspections a month for $6.50 each.

    So the company started fabricating reports for follow-up inspections, using re-dated photographs taken at the first visit, according to documents filed in U.S. District Court in Tampa.

    Altogether, the company defrauded the bank of nearly $12.8 million out of the $23.5 million paid for inspection services on properties in various states of foreclosure or resale between 2007 and 2012, according to court documents.

    Although Bank of America paid for the inspections, it billed the entities that owned or insured the mortgages, including taxpayer-funded Fannie Mae, Freddie Mac and FHA.

    Company owner Dean Counce, 42, of Spring Hill, has agreed to plead guilty to a federal charge of wire fraud, which carries up to 20 years in prison, although he is likely to receive less. He is required under his plea agreement to cooperate with authorities and pay restitution.

    Counce's lawyer, John Fitzgibbons, suggested there will be more prosecutions.
    "Mr. Counce has admitted that he participated in wrongdoing in his business, and he is very remorseful for some of the things that happened," Fitzgibbons said. "I anticipate that there will be others who will reach the same conclusion as Mr. Counce, that it is in their best interest to admit their wrongdoing and move forward."(1)
  • [Stacie] Gearhart said she was paid $9 an hour and never received her final paycheck for 68 hours of pay. Gearhart said she knows of about 15 other employees who also lost their last paycheck, although Counce did write personal checks to some. One co-worker who didn't get paid, she said, lost her home. Fitzgibbons said Counce is trying to pay the employees he owes.

    "Since the time that the federal authorities raided the business, which basically shut it down," Fitzgibbons said, "Mr. Counce has made many, many employees whole. Mr. Counce has paid almost all of his employees. There are a few that are still left and he is hopeful that eventually everyone will be paid." Gearhart said Counce generally treated employees well, buying them food when they had to work overtime.

    According to Counce's plea agreement, employees who created large amounts of fraudulent inspection reports were often given cash bonuses.

(1) In essence, by making this indirect 'announcement' that his client is 'singing' to the Feds with the view of taking down as many other people as possible and 'throwing them under the bus' to save his ass and keep any time he spends behind bars to a minimum, I suspect that this is Counce's defense counsel's less-than-subtle way of persuading others to just come forward and admit their guilt. After all, the more scores the Feds ring up that can be credited to Counce's cooperation, the lighter the 'judicial hammer' he'll be belted with when his sentencing day arrives:

  • "When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed." United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring).

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