Fraud, by the numbers: four fictional investors, $2.8-million in loans, one big investigation.
By JEFF TESTERMAN
Published January 22, 2004
TAMPA - Two years ago, a mysterious investor named Brandon Green began paying top dollar for rundown properties in the Tampa Heights and Ybor City areas.
Green bought an apartment house, a commercial building, two duplexes and a single-family home. For each one, he paid double or triple the market value. He signed for five mortgage loans totaling nearly a million dollars and made a few payments on each loan.
Then, he disappeared.
To just about everyone connected to the deals, Green turned out to be the invisible investor.
Neither the sellers of the properties nor the title agents who prepared real estate closing papers ever saw him. The tenants of Green's buildings and his own property manager say they never laid eyes on him. Lawyers and process servers who tried to serve Green with foreclosure papers on all five properties could not find him. One process server who works as an investigator said that it was impossible to determine if Green was "living or dead."
There's a simple reason:
He doesn't exist.
"He's supposed to be this investor, but he's a made-up person," said David A. Walker, a mortgage broker and former officer with Rudy L. Arnauts and Matthew B. Cox in an investment company called Urban Equity Inc.
Walker said the idea to use phony identities originated with Cox, now a fugitive being sought by federal and state authorities for failing to report to his probation officers.
Cox, on probation after pleading guilty to mortgage fraud and grand theft charges in 2002, disappeared in early December, shortly before the Times published an investigative report about dubious real estate deals involving the Urban Equity businessmen.
Walker said the false identities Cox dreamed up to buy, sell and mortgage properties in Tampa Heights and Ybor City included the names Brandon Green, James Redd, Allen Duncan and James J. Colon. County records show those four names were used to buy 21 Tampa properties, which were then pledged as collateral for more than $2.77-million in mortgage loans.
The total purchase price for those properties was $3.22-million, the deeds show. But according to sellers interviewed by the Times, the recording information filed with the deeds was falsified to indicate much higher prices than actually paid.
One example: the three-story antiques shop and residence at 105 W Columbus Drive in Tampa Heights. Elaine Mostow, 66, a widow who now lives in Floral City, said she sold the 95-year-old building to Green for $90,000.
The deed was recorded showing a price of $244,500.
Green's name was then signed on a mortgage from Principal Residential Mortgage for $196,000. Principal got its last mortgage payment from Green seven months after the loan originated.
Principal officials never heard from Green again, according to court records. The lender foreclosed and obtained title to the property in November and is now trying to unload the commercial building.
Mrs. Mostow said Brandon Green did not attend the closing and she never met him.
She recalled a variety of excuses offered to explain Green's absence. Money had to be wired from Italy for the purchase, she was told, and Green was delayed by a rainstorm on the day of closing.
"The method (of closing) was strange, to say the least," Mrs. Mostow said.
A driver's license bearing the name Brandon Green was photocopied and placed in title company files at several closings, including the one for Mrs. Mostow's property. The license, however, uses the same state number, date of birth and address that appear on the ID for another of the phony buyers, Allen Duncan. The address used on both is actually the location of a Mailboxes Etc. business in Tampa.
While the information on the IDs is identical, the pictures are quite different. The driver's license for Green shows a bald African-American man. The state identification card for Duncan is a photo of a white man with shoulder-length hair.
The ID number on each card has never been issued by the state, records show.
Similarly, two separate ID cards with the same number and date of birth were submitted to title companies in two different closings involving James Redd. The signature on both cards is the same. But one card bears the picture of a white man; the other, a black man.
"I was just duped," said Mary Lou Jackson, owner of Elite Title Agency in Palm Harbor, the company that prepared documents for the five Brandon Green purchases and forwarded them to an outside party who handled the closings.
FBI, police involved
A series of property transactions involving Urban Equity and its officials - Walker, Cox and Arnauts - is now at the center of an investigation by the FBI and Tampa police. The inquiry was sparked by questions from the Hillsborough Property Appraiser's Office about artificially inflated purchase prices and by a Maryland lender's complaint about a forged loan payoff filed after an Urban Equity sale.
In a two-hour interview, Walker told the Times that he made every effort to cut ties with Urban Equity after he learned that Cox was behind the use of false loan payoffs, filed as loan satisfactions, and the use of fake identities to obtain mortgage loans.
Walker's attorney, Steven R. Loewenthal, said he has called Tampa police and the U.S. Attorney's Office to offer Walker's cooperation. So far, he said, he has received no calls back.
"Mr. Walker may very well be a target of the investigation," said Loewenthal. "But in my opinion, he should be considered a victim in this as much as any other victims.
"He's guilty only of being in business with bad people and trusting them."
Walker said he became one of Cox's business associates after purchasing Diversified Mortgage Co. from Cox two years ago and renaming the mortgage brokerage firm United Capital Trust of Tampa. Cox worked in Walker's office on W Busch Boulevard even after losing his broker's license when he was placed on probation in 2002 for his part in a pair of mortgage frauds.
Walker said Cox came to him last year after learning that an Ybor City lender had discovered a forged mortgage satisfaction filed at the courthouse.
"He asked for me to go to the guy and make it right," Walker said. "It was at this time that he told me about the fake people he'd made up."
The names of Walker, Cox and Arnauts show up on documents numerous times as sellers or buyers in connection with the fake names.
Arnauts, who still lives in Hillsborough County, declined comment through his attorney.
Walker says that until he learned of phony names being used to buy property, he didn't ask Cox too many questions about the real estate deals.
"Matt was my partner," said Walker. "We were in business together. He gave me papers to sign. I did what he said."
But after the loan payoff forgery surfaced, Walker said he made a beeline to Urban Equity's attorney and asked him to immediately draw up papers to cut ties with the company. His resignation was filed with the state in late November.
Walker now says that his Florida notary seal and his forged signature were placed on documents without his knowledge or permission.
Walker said he was forced to shut down United Capital Trust after the first stories in the Times were published linking Urban Equity to falsified deeds and mortgage documents. He said most of his brokers "cleaned out their desks and left" after the stories appeared in the newspaper.
"The banks have said they will no longer do business with me," he said. "The mortgage underwriters have blacklisted me.
Lenders, tenants suffer
A number of mortgage lenders have started to revisit the loans to the invisible investors and have begun to add up losses.
The name Brandon Green was used to buy five properties and obtain five mortgage loans. Five times, lenders have sued to foreclose after payments ceased. Now, lenders are taking the properties back and finding they're worth nowhere near the prices on the deeds.
The 1,660-square-foot duplex at 1214 12th Ave. in Ybor City, for instance, was sold to Green in September 2000 for $50,000, according to seller Antonio Santana, an automotive teacher at Tampa Bay Tech. But the deed was recorded to show that Green paid $185,000 for the property.
"One hundred eighty-five thousand? That's incredible!" Santana said when told of the deed. "If I'd gotten that much, I'd be somewhere else with all that money invested."
Later, Brandon Green's signature was affixed to a $166,500 mortgage loan from Oak Street Mortgage LLC, listing his address as that of a Mailboxes Etc. store on Waters Avenue. The loan closed in December 2002. Oak Street never got a payment after January 2003 and filed a foreclosure suit in May.
The lender is now trying to sell the property - at a loss - for $129,900.
Local title companies, too, have begun to review their files and are wondering if they face liability regarding the false IDs.
Jackson, of Elite Title, said orders to prepare the Brandon Green closing papers came from Kimberly Goldsborough, a Lutz resident and licensed Florida notary who notarized all of the Green signatures on loan documents.
Goldsborough was a marketer who offered to bring lots of loan closing business to Elite from Urban Equity and others, Jackson said, and did so for months without any problems. Since the loans were always closed away from Elite's office, no one at Elite had any notion that fake names began to be used at closings.
But problems began to crop up. Signatures weren't witnessed, IDs weren't obtained, and some closing statements even appeared falsified, Jackson said.
"I finally called a halt to that business," said Jackson, who has since contacted investigators. "I just tried to separate myself from these people."
Goldsborough said she knew nothing of any fake names and could not recall Brandon Green.
"You're telling me this and it's the first I've heard of it," Goldsborough said. "I only know to match the ID I get with the person there (at closing). I don't know if it's valid or not."
Tenants at properties purchased by the invisible investors also suffered.
Yansa Galinto is a 20-year-old mother who lives with her parents, brother and young daughter in a home at 2921 N 9th St. in East Tampa. The white clapboard house was purchased under Green's name in the summer of 2002. Now, she's getting ready to move, she says, because conditions have deteriorated since the place changed hands.
"It's roach-infested, there's no heat, nothing gets fixed," said Galinto. "That's why we're moving out."
It became obvious to Galinto that her $350 monthly rent was not being applied to Green's mortgage payments when foreclosure notices began arriving at the home. The lender was awarded a judgment of $128,456 in December and will likely take possession of the property in coming weeks.
Galinto usually handed her rent payments to Keyla Burgos, a property manager who is the ex-wife of Matthew Cox. Burgos collected the rent on all of Green's properties, but said she has never met Green or even talked to him by phone.
"He's an out-of-town investor," said Burgos. "It was the idea of Rudy (Arnauts) and Matt. I collect the rent and they send it to Brandon Green."
Burgos said she had no idea how to contact Green, or any idea where Cox might be.
Walker said he had no knowledge of Cox's whereabouts either, but wondered if a book Cox had written offered a clue. It's an unpublished book, a 300-page potboiler that Cox had left on desks in the brokerage office, Walker said.
"It's about a mortgage broker," Walker said. "He ends up in Paris."
- Times researcher Cathy Wos and staff writer Amy Wimmer contributed to this story. Jeff Testerman can be reached at firstname.lastname@example.org or 226-3422.