by Frank Weir
Legal News
Abed Hammoud, the dynamic lead attorney for the Wayne County Prosecutor's Office Deed and Mortgage Fraud Task Force spoke to a luncheon sponsored by the Washtenaw County Bar Association’s Real Estate Law section recently.
“It never captures the headlines like a vicious violent crime, but deed and mortgage fraud does more damage to society in many ways,” he said to begin.
The Deed and Mortgage Fraud Task Force was established in 2005 through funding provided by Register of Deeds Bernard J. Youngblood.
Hammoud was appointed to the Deed Fraud Task Force at the end of 2006 by Wayne County Prosecutor Kym L. Worthy. Since then, the Task Force has become nationally recognized and recently received two federal grants totaling over $1.65 million (over two years).
The Task Force has handled over 650 complaints during Hammoud's involvement with it resulting in 120 prosecutions and hundreds of investigations. They boast a 99 percent conviction rate.
The grant money has allowed for the addition of five more attorneys and six additional investigators, he said.
“I have come to believe that mortgage fraud has a devastating impact on society,” Hammoud began.
“If a mortgage or deed fraud occurs near you, it affects everyone. There is a negative impact on taxes, income for your city, governmental assessments are affected, different businesses and institutions are hurt.
“I honestly believe that mortgage fraud has a lot to do with our current economic crisis based on the number of complaints that we receive just in and around Wayne County.
“Until we address some of the things that allow deed and mortgage fraud to occur, we won't completely heal our economic ills.”
Hammoud noted that any time someone obtains money from a financial organization by using a false material fact, mortgage fraud is involved.
Such falsehoods usually include lying on mortgage applications about marital status, about whether the borrower will actually live in the property, about income and employment of the borrower.
Given the complexity of the investigations involved in frauds of these types, cases can last a year or two, Hammoud said, and the task force does not charge based on probable cause only.
“We charge only when there is evidence beyond a reasonable doubt. We won't charge and then figure it out later. We don't want to clog the courts; these cases are difficult to investigate and prosecute. And we of course don’t want to pursue the wrong parties.
“There are literally mountains of paperwork involved.”
Hammoud said that when a complaint comes in, investigators cannot even be certain who will end up being the defendant.
“Recently a woman came in as our complainant and after the investigation, she became the defendant.
“I can’t emphasize enough how important it is in our cases to ‘follow the money.’
“Fraudsters, as we call them, flip and flip and flip checks, constantly laundering ill-gotten funds.
“So we look to see where the money ends up. If one party ends up with tens of thousands of dollars, and another $1,000, we have a good idea who is the leader.”
He noted that they try to pursue the big offenders and not necessarily the one-time occurrence of a borrower lying about one fact: “We focus on those crimes that affect a lot of people, that are organized attempts to defraud on a large scale.”
An example, Hammoud said, is a Pittsfield Township resident now serving 9-20 years in prison who was convicted of numerous counts of uttering and publishing, forgery, identity theft, false pretenses, and money laundering in a scheme in which he and co-conspirators obtained ownership of paid-off homes from elderly owners in Detroit, and obtained bloated appraisals and mortgages on them.
The scheme also involved swindling investors who honestly thought they were participating in a legitimate transaction, with the fraudster using their good credit and setting up straw buyers and shell companies.
“Many like him think they can swindle the system. They say, ‘Go ahead. Try me.’ They honestly don't see themselves as criminals. Like typical ‘confidence men,’ they dress nicely, and are very presentable.
“Those are the ones we want to send to prison. It’s very important to us to tell the community that these are very serious crimes. They are not just paperwork mischief; they are not small- time, petty offenses by any means. Elderly homeowners in Detroit lost everything they had because of this individual.
Deed fraud is another area that the Task Force pursues and can naturally be a part of larger mortgage fraud schemes.
One of Hammoud's favorite deed fraud cases was when a fraudster used a form deed that had been revised by the printing outfit in 1997 and said so at the top of the form, but the deed supposedly had been signed in 1995.
“Needless to say, we look for red flags, even the obvious –– and unbelievably careless –– ones,” he said.
Hammoud noted that there is no state statute on mortgage fraud currently but he would very much like to see one enacted. He said that there are attempts currently to enact one.
And given that deed requirements are very simple in the state, there is room for mischief.
The Task Force uses criminal law statutes, including forgery, uttering and publishing, money laundering, and even embezzlement to catch fraudsters. Statutes involving racketeering and criminal enterprising can also be utilized.
Wayne County Task Force coordinates with federal agencies which are committed to investigating mortgage frauds including the FBI, the Secret Service and HUD. He notes that financial thresholds can be quite high for federal authorities to get involved while his Task Force takes on cases involving much smaller sums.
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