Breaking Bad . . . In New York & New Mexico
New York City and New Mexico. Two places at obvious opposite ends at first glance . . . as far as economy, population, climate, geography. (The population of New York City alone is larger than that of New Mexico’s entire state.) But the two also share common problems.
In New York City, home of “the big deal,” real-life crime is common and, sadly, is often seen as just another everyday news item. Typically, New Yorkers hear the latest – maybe a Ponzi scheme, maybe a fund raising scam, maybe healthcare fraud – and then shake their heads . . . and turn the page. There’s no end of get-rich-quick schemes and ploys in the Big City, where “strike it rich” is a constant byword.
In New Mexico, “The Land of Enchantment” and home of the fictional hit “Breaking Bad,” real-life crime is also too common, just not aired nationally. Rampant crystal meth manufacture (#1 in the U.S.) and land and get-rich-quick schemes are “frequent flyers.” Maybe it’s the state’s fragile struggling economy, maybe it’s because of the lower standard of living – but whatever the reason, the lure of “strike it rich” is just as strong.
(Good news: The minimum wage in New Mexico was just elevated by the state legislature – and is now #2 in the nation.)
In New York City, the specific crime – here an investment scheme – is described as a “tornado” of activity. In New Mexico, it is referred to as a destructive “dust storm.” But despite different local descriptions, the means to the end are same: Conspiracy, fraud and money laundering.
Investors are at risk . . . but criminal attorneys, experienced in these matters, are available, always. The Blanch Law Firm is on hand, for whatever the problem.
In New York City, on the advice of his criminal attorney, Mitchell Cohen, owner of the now-closed “Buy-A-Home” real estate brokerage, pleaded guilty to conspiracy to commit wire, bank and mail fraud. This fraud was linked to a multimillion-dollar fraudulent mortgage scheme after an extensive criminal investigation. “StopFraud,” the federal government’s financial fraud enforcement task force, stated Cohen is scheduled to be sentenced in April 2013.
Preet Bharara, U.S. Attorney for the Southern District of New York, stated “[Cohen] left a trail of destruction in his wake.”
“[Because of mortgage fraud] borrowers could ill-afford the homes he pushed them to buy, banks were saddled with bad loans, taxpayers’ tax dollars paid the insurance claims . . . when borrowers defaulted. [He] also thumbed his nose at the legal process by defying a judge’s order and then lying about it under oath.”
Cohen faced allegations of buying – or promising to buy – from home owners homes at one price. He then lured these buyers into closing – on misrepresented properties – for inflated prices, often for more than $100,000 above what he had originally paid.
He then would have his “Buy-A-Home” employees pay off clients’ debt by funneling money (a form of money laundering) through bank accounts belonging to relatives of the borrowers. According to the charges, it would appear debts had been paid by appropriate sources, making the borrowers seem creditworthy. The ultimate fine and/or asset forfeiture has not been determined as yet.
In New Mexico, where the housing boom has been like the rebirth of the California Gold Rush, real estate is a prime target of fraudulent activity, activity “as destructive as a dust storm,” said a spokesperson from the U.S. Attorney’s Office in N.M.
Manuel Garcia entered a guilty plea to an indictment charging him with 6 counts of bank fraud. Again, an intensive criminal investigation proved his undoing. Garcia faces a maximum sentence of 30 years, 5 years supervised release, and a $1 million fine.
Mr. Garcia was president of Keyworth Mortgage Funding Group. Keyworth originated residential mortgage loans and sold them to investors such as Fannie Mae. In turn, Keyworth fraudulently obtained loans from Fannie Mae. Garcia falsely represented existing properties as new mortgages, receiving wire transfers from Fannie Mae in an excess of $1.2 million. In reality, these Fannie Mae loans were being used to pay off original debts to Fannie Mae.
In a separate New Mexico case three men were charged with conspiracy, fraud and money laundering. Their fraudulent enterprise, Puerto Penasco Getaway, bilked investors of over $7 million in a bogus real estate development scheme.
Both cases were originally investigated by the FBI, then pursued and prosecuted by the U.S. Attorney’s Office.
Sure, New York City numbers (Bernie Madoff and $60 billion Ponzi scheme immediately comes to mind) are eye popping. So ‘s the Yankees’ annual salary.(And criminal forfeiture in 2012 reached $3 billion, according to Mr. Bharara.)
In New Mexico, federal prosecutors collected only $9 million, or so, in 2012.
But the fact remains: No matter the stage or state, no matter the money – people and institutions will be victimized by schemers and con artists. The game doesn’t change.
Neither does The Blanch Law Firm. It’s stance is to see the big picture. It speaks for both sides.