Flipping Frenzy has always admired the breadth and accuracy of Jeff Testerman’s reporting. Testerman, who writes for Florida’s St. Petersburg Times, is on the leading edge of news reporting that focuses on Real Estate and Mortgage Fraud. His latest article, which appeared in this Sunday’s edition of the St. Petersburg Times, is quoted below.

Home Buying Spree Snaps
A year after a woman bought 10 overpriced properties, she’s not the only one hurting.

By Jeff Testerman, Times Staff Writer
Published September 9, 2007

Jill Jackson, a single mom and apartment renter with an annual take-home pay of about $24,000, managed to go on an incredible real estate buying binge last year.

In the span of 10 weeks, she bought 10 properties. She did not put a single penny down, borrowing the price for all 10 by signing for mortgage loans totaling $1.84-million.

The investment plan seemed too good to be true. And it was.

A year later, Jackson’s portfolio has collapsed like a house of cards, with every one of the 10 properties in foreclosure and Jackson’s credit wrecked. The 31-year-old says she was foolish to fall for the get-rich-quick scheme pitched to her by a church acquaintance.

“I didn’t know what I was doing,” Jackson acknowledges. “I don’t have any background in real estate.”

Jackson says she was enticed into the investment plan by Investors Outlet, a Tampa company run by William Ondra Joel II.

Joel, 27, is a former $8-an-hour worker at a Tampa mental health center who got into real estate after seven arrests on drug charges. He did four months in a Georgia boot camp in 2002 for cocaine possession.

“They arranged everything,” Jackson says of Investors Outlet. “They picked out the properties. They selected the lenders. I was just told to go the closings, and that’s what I did.”

Beginning with three closings on a single day in February 2006, Jackson says she followed the Investors Outlet instructions, buying 10 properties she never had seen. She paid about $700,000 more for the portfolio than the county property appraiser said the properties were worth, a premium of 61 percent.

That wasn’t a problem, though. At every closing, loan papers were waiting for her that provided 100 percent of the price. She just signed.

What Jackson says she did not know was that Joel and Investors Outlet were pushing up the prices of the properties by quietly changing contracts before she ever arrived at a closing.

Investors Outlet bought the 70-year-old, two-bedroom home at 3120 N Woodrow Ave. in Tampa Heights for $140,000, then conveyed it to Jackson at closing for $205,000, pocketing most of the difference, according to the seller.

The home is in a poor location, across the street from an electric substation that is surrounded by a chain-link fence topped with barbed wire. Seller Tony Muniz was surprised that the home went for $205,000 — with a loan for $205,000.

“It’s hard to see how the investor got 100 percent financing,” Muniz said. “It’s kind of scary.”

Jackson could not find tenants to pay the rent she needed to repay the mortgage. Seven months after she signed for the loan, the lender filed foreclosure papers.

Her other nine properties went the same way, with the 10th foreclosure suit filed last month.

“This is a snapshot of what’s happening in every village, town, city and county in America,” said Ralph R. Roberts, a real estate broker, bestselling author and real estate industry watchdog.

“A lot of unassuming young men and women are being induced to be straw buyers.“

You can read the rest of Home Buying Spree Snaps here.

From my co-author, Attorney Rachel Dollar of Lanahan & Reilley, LLP, and MortgageFraudBlog.com:

Matthew Bevan Cox, 37, pled guilty to mortgage fraud, identity theft, passport fraud, and probation violation charges arising from a Northern District of Georgia indictment, criminal informations filed by the Middle Districts of Florida and Tennessee, and a Middle District of Florida revocation petition.

“Cox was the subject of a three-year nationwide manhunt while he continued to commit mortgage fraud under stolen identities in multiple states, leaving a trail of victims and missing money, said United States Attorney David E. Nahmias in Atlanta. “The repeated use by Cox of the stolen identities of minor children, the homeless and others to place multiple fraudulent loans on the same property without the knowledge or consent of the true owners has resulted in clouded property titles in several states and years of unresolved litigation. He will now face the long prison sentence he deserves for his crimes.”

According to the information presented in court: Cox rented or agreed to purchase properties from true owners, fraudulently erased prior mortgage liens and assumed the identity of the owners, used a stolen identity or paid straw borrowers to obtain multiple mortgage loans on the same property. Cox then changed locations and committed similar mortgage fraud schemes in other states. Cox and his co-conspirators used stolen identities to execute the mortgage fraud, including identities of minor children and those he received from conducting “Federal Surveys” of the homeless and drug rehab patients. Cox also used these stolen identities to obtain drivers licenses and state identification cards, purchase vehicles, lease mail drops and virtual offices, rent apartments, obtain credit cards, open bank accounts, and to apply for birth certificates and a passport used for travel to Jamaica, Greece and other foreign destinations while a federal fugitive.

Click here for the rest of Rachel’s write-up.

More, from our good friend Jeff Testermann of the St. Petersburg Times:

• In Tampa, according to the newly filed charges, Cox committed $8.6-million in fraud on transactions involving 77 properties in the Tampa Heights and Ybor City areas.
• In Nashville, Cox committed $2.35-million in fraud on 22 properties, according to the new charges.
• Cox was helped by 22 unnamed co-conspirators in Tampa and Nashville, the new charges reveal.
• Now, in a deal with the government, Cox, 37, says he will plead guilty to the new charges as well as to charges in a 42-count indictment filed in Georgia in August 2004, when he was a fugitive whose name topped the Secret Service’s most-wanted list.
• Facing as many as 422 years in prison, Cox’s plea deal presumably will save him from a life term in return for his cooperation in pursuing accomplices.
• The charges in Tampa list 16 unnamed co-conspirators, identified by initials only. The charges covering Cox’s activities in Nashville list six more unnamed co-conspirators.

2006-04-04 11:45
Jeff Testerman over at The St. Petersburg Times wrote an excellent article about Rebecca Hauck’s arrest and the continuing search for Matthew B. Cox. From Testerman’s article, titled Bonnie and Clyde with a new twist:

Hauck, 34, a former legal secretary who left behind a young son to join Cox, was arrested by the U.S. Secret Service last week in Houston. She awaits transfer to Atlanta for arraignment on a 42-count federal indictment that could subject her to more than 400 years in prison on charges of conspiracy, wire fraud, bank fraud, money laundering and use of stolen identities. …

… In Atlanta, U.S. government prosecutors hope Hauck will provide clues to Cox’s whereabouts. “Sentencing provisions provide for the possibility of leniency for cooperation,” said Gale McKenzie, an assistant U.S. attorney in Atlanta. “We would still very much like to know where Mr. Cox is.” …

… In Atlanta, Cox and Hauck established headquarters and adopted new identities for a new round of fraudulent loans, the indictments say. Cox stole the identity of Gerald Scott Cugno, a Tampa mortgage broker who had worked with Cox for several years. Hauck took the name of Michielle V. Joseph, a former in-law, before becoming Grace E. Hudson, who checked in to an Atlanta plastic surgery center for a $12,000 facelift to change her appearance, authorities said. …

… Officials were keeping mum this week about whether Cox and Hauck were still working together when she was arrested in Houston.

No one has covered the Matthew Cox and Rebecca Hauck story like Jeff Testerman of The St. Petersburg Times His in-depth investigative reporting has helped countless people, including real estate industry insiders like myself, stay on top of the situation. Click here for Jeff’s entire article.

In an excellently written article in today’s St. Petersburg Times, staff writer Jeff Testerman calls our attention to a Tampa, Florida-based Internet company that promises to provide “phony but authentic-looking pay stubs” to anyone who’s willing to pay. From today’s St. Petersburg Times:

On its Web site, the company says you might need its product if you’re depressed about your lousy income and want to “look like you make big bucks.” It also suggests buying a fake pay stub if “your spouse thinks you’ve been at work and you need proof.” But a real estate industry watchdog and a federal lawsuit against the company call it an invitation to lending fraud.

The outfit Testerman refers to in the article is but one of many shocking examples of companies that are making considerable sums of money by aiding in practices that are criminally deceptive. Oftentimes, their offices bounce from state to state in an effort to find a state with a degree of ignorance or tolerance for their shady activities.

Click here for the entire article, which includes a few quotes from your’s truly. And remember, since committing fraud is no accident, preventing it shouldn’t be one either!