Intricate deception used in loan scam, investigators say
By JEFF TESTERMAN
Published April 4, 2004
TAMPA - Seventeen months ago, a businessman from Tampa named Michael Kevin White bought a run-down home in Orlando, hired a lawn service to cut the grass and put sheets up over the windows.
White represented himself as the up-and-coming employee of a loan underwriting company. He handed out W-2 statements and bank letters to establish his creditworthiness. He opened business and personal accounts at the Crown Bank in neighboring Seminole County. He paid off his loans on the Orlando home, then took out new ones.
Yet neighbors never saw White, and for good reason. He never existed.
White was the product of a swindler's imagination. The Social Security number he used actually belonged to a toddler. His W-2s were phony. His identification, references, rent receipts and bank letters were all counterfeit.
All of that emerged, along with White's real identity, after Crown Bank questioned the validity of checks he was trying to deposit last summer. Altamonte Springs police say they found phony IDs and credit cards in White's name in the possession of Michael Travis Hayes, and started delving into his murky financial history.
As police unraveled Hayes' activities, their investigation pointed back to Tampa and to Matthew Cox, the purported mastermind of a multimillion-dollar scheme to defraud Tampa Bay area lenders.
Hayes, 32, a longtime friend of Cox, was driving Cox's 2003 Dodge Ram pickup when he was arrested in Altamonte Springs. Hayes also worked with Cox at United Capital Trust, a mortgage brokerage company in Tampa.
The alias of the loan officer who handled the loans on the Orlando home is the same alias used by Cox in a similar scheme in Pinellas County. And a home Hayes recently sold in Tampa - for triple what he paid for it - was sold to one of several fictitious investors dreamed up by Cox in order to obtain big mortgage loans on overpriced properties.
Cox, sentenced to probation for mortgage fraud and grand theft charges in 2002, disappeared in December. He is now a fugitive being sought by state and federal authorities for violating probation.
Cox dropped out of sight as the FBI and the Tampa Police Department began an investigation into the use of phony buyers, false deeds and fake credit histories to obtain millions in fraudulent mortgage loans in the Tampa Heights area.
Based on property records and information from David Walker, who bought United Capital Trust from Cox when the company operated under a different name, the St. Petersburg Times has documented the use of several identities allegedly invented by Cox to obtain more than $2.7-million in mortgage loans in the Tampa Heights area.
There were variations, but the scheme appears to have worked this way:
Cox and those working with him bought old houses at bargain prices, then filed falsified deeds to reflect hugely inflated purchase prices. Fictitious buyers, having shown an apparent willingness to pay high prices, then set about taking out big mortgages. Whole credit histories were created for the phantom buyers - often portrayed as CPA's - with computer-generated drivers licenses, employment records and even tax returns.
Someone posing as the fake buyer signed for the mortgage, handed the check to Cox or his confederates, then faded away, leaving the banks and mortgage companies holding title to near worthless buildings, with no one to pay the bills.
A recently released Altamonte Springs Police investigative report on Hayes, alias White, now connects the dots between Cox's elaborate scheme to use phantom buyers to sign for millions in fraudulent mortgage loans in Tampa, and the effort to export the scheme to Pinellas and Orange Counties.
Altamonte Springs police arrested Hayes on charges of using a false ID in White's name to open a bank account, the only crime that appears to have occurred in its jurisdiction. The department referred related bank fraud allegations in Orange County to the Florida Department of Financial Services.
That agency has begun an extensive audit of loans originated and handled by United Capital Trust, the company which was owned by Cox and later employed Hayes.
The Orlando Phantom: Michael Kevin White
Hayes was arrested in Altamonte Springs last July after police said they found him using an ID and possessing credit cards in the name of Michael Kevin White.
According to a report by officer Sandi Gibb, Hayes opened a business account at Crown Bank by depositing the proceeds of a mortgage refinance check on a home purchased under the name Michael Kevin White in Orlando. The loan officer who handled the loan was James Monk. That was the same alias Cox used when he rented a Pinellas home that figured in a fraudulent mortgage loan scheme.
Investigators pored over records at the Orange County courthouse. It turned out there were two recent mortgage payoff documents on the Orlando home. There were also two recent loans on the Orlando house, one for $51,300, another for $66,750.
Police say they discovered the two payoffs had been forged. They also found a series of falsified records involving White's two new mortgage loans:
The loan applications included a Social Security number for White that actually belonged to a 2-year-old child.
W-2 statements were from a non-existent company called Underwriting Specialists.
A phony bank statement accompanied the loan applications.
Fake canceled checks were submitted for the loans which purported to show that White had made rent payments on a home in Tampa, a property that turned out to be owned by a Cox business associate.
The payments on the Orlando mortgage loans ceased in December, and a private lender who made one of the loans to White said he would soon initiate a foreclosure action.
Hayes, who now operates a company called Two Men and a Chainsaw in the Tampa area, declined comment, referring comments to his Orlando attorney, Robert Leventhal.
Leventhal said Friday it would be premature to comment on Hayes' arrest now because of both his pending charge and the ongoing criminal investigation into Cox and others in Tampa. Leventhal said Hayes has offered his cooperation to the task force in Tampa but has not yet heard back from investigators.
The Pinellas County Phantom: Rosita Perez
In tracking three checks Hayes tried to deposit at the Crown Bank, Altamonte Springs police followed another trail that led them to a mortgage scam allegedly involving Cox in Pinellas County.
The three checks, totaling $93,572, were from a woman named Rosita Perez. A bank employee noticed the state ID number presented for Perez was not valid.
Investigators later learned that the same invalid ID had been presented at a loan closing in Tampa when a woman claiming to be Perez signed for a $117,000 refinance check on a Palm Harbor home she claimed to have purchased for $185,000.
The mortgage refinance occurred on July 3, 2003, 20 days before the Perez checks were presented for deposit by Hayes in Altamonte Springs.
Perez is another in the series of invented identities. A woman going by that name and carrying a fake ID obtained title to the Palm Harbor home by using a forged deed filed at the Pinellas County Courthouse, records show.
The signature on the deed looked genuine. It had apparently been lifted, however, from a lease-option agreement between the real owner and a woman who called herself Perez, and rented the Palm Harbor House with her boyfriend, who gave his name as James Monk.
Monk and Perez never moved in. Neighbors said Perez occasionally stopped by to check her mail, and said she wore a baseball cap and gloves.
Clearwater police opened their own investigation. Ultimately, the Palm Harbor home's real owner identified Monk as Matthew Cox and Perez as Alison Blecker, a one-time employee of United Capital Trust.
Blecker recently told the St. Petersburg Times she is cooperating with the FBI.
The Tampa Phantom: James Redd
In September, just 60 days after his arrest in Altamonte Springs, Hayes was involved with another phantom buyer. This time, the phony buyer was James Redd, who was paying a premium price for a tiny home in one of Tampa Heights' grittiest areas, a 729-square-foot home at 2905 N 24th St., a house Hayes bought just five months earlier.
Hayes had paid $22,000. He sold it to Redd for $80,000.
Redd, or rather someone pretending to be him, signed for a $72,000 loan to make the purchase. United Capital Trust, which had employed Cox, Hayes and Blecker, handled the loan.
According to closing documents, Redd was supposed to be the 28-year-old, $94,000-a-year marketing director of a Tampa company called Express Tax Service. Express Tax Service does not exist. The phone number for the company is actually a St. Petersburg answering service where operators still promise to have Mr. Redd phone you "when he checks in."
On the loan application, Redd claimed he would occupy the home on 24th Street. But today it is vacant, with most of its windows broken and the railing on the front porch ripped apart.
Meanwhile, an intense scrutiny of loans handled by United Capital Trust by the state Department of Financial Services continues. Asked recently when the audit might be complete, Tampa examiner supervisor Tom Spock replied, "It may take months."
- Researcher Cathy Wos contributed to this report. Jeff Testerman can be reached at 226-3422 or by e-mail at firstname.lastname@example.org