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No happy ending for master of loan fraud

By JEFF TESTERMAN
Published April 11, 2007


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ATLANTA - Standing in a courtroom in sneakers and an orange jumpsuit Tuesday, mortgage fraud mastermind Matthew B. Cox sealed the last deal he will probably make for decades.

Facing 422 years in prison, he negotiated a plea with the U.S. government that exposes him to a maximum sentence of 54 years and a possible fine of $2-million.

"He's never denied the things he did," said his public defender, Mildred Dunn. "He decided to plead guilty and put this all behind him."

He was arrested in November. In the plea bargain, prosecutors rolled fraud totaling $8.6-million on 77 properties in Tampa into one conspiracy charge. They dropped 41 of 42 charges in an Atlanta indictment alleging mortgage fraud, identity theft and wire fraud in Georgia and the Carolinas, keeping only a single bank fraud charge punishable by 30 years in prison.

They consolidated those charges with three felonies filed in Nashville. Cox agreed to plead guilty to the package and to cooperate with an ongoing federal investigation.

If his assistance is deemed "substantial," prosecutors will recommend that Cox receive some leniency when U.S. District Judge Timothy C. Batten sentences him. After adjudicating Cox guilty of the reduced charges Tuesday, Batten scheduled sentencing for Aug. 22.

Cox listened impassively as Assistant U.S. Attorney Gale McKenzie recited a litany of his crimes. Conspiracy to defraud lenders in Florida. Violating probation by absconding from Tampa. Bank fraud in Georgia. Identity theft, conspiracy and passport fraud in Tennessee.

After each charge, the judge asked Cox if he were guilty. Each time Cox answered, "Yes, your honor."

Gone was the swagger and bravado that propelled Cox on a five-year crime binge across five southern states, committing so much fraud that the FBI and the U.S. Secret Service could barely catalog it.

Not a single relative, friend or loved one came to the courthouse in Atlanta to support him.

This week, the government revealed that 22 people - 16 in Tampa and six in Nashville - conspired with Cox in his schemes to defraud lenders and property owners.

McKenzie said Tuesday that Cox "has already cooperated fully in Georgia and Tennessee, and gave a detailed outline" for investigators in Florida.

A former Tampa insurance broker, Cox, 37, became an outlaw in 2002 with convictions on grand theft and mortgage fraud. He got only fines and probation.

He then penned a 317-page crime novel, The Associates, in which a fictional protagonist leaves a dead-end insurance job and executes an elaborate plan to defraud lenders of millions before making his getaway.

The Associates, never published but now an exhibit in federal court records, turned out to be Cox's blueprint for crime. It foretold in extraordinary detail the fraud he would commit from Tampa to Tennessee.

In Tuesday's hearing, McKenzie detailed Cox's verve and creativity, describing how he stole identities by posing as a federal statistical surveyor, paid kickbacks to mortgage originators, used software to generate phony appraisals, created phony companies to supply fake pay stubs and income tax statements for straw borrowers that he employed or invented out of thin air.

"His IDs were so good that when a bank alert went out for him and the Richland County S.C. Sheriff's Office picked him up, they let him go because they thought he was someone else," McKenzie said.

"He put a different twist on the classic property flip," the prosecutor said.

Cox didn't just flip a property for profit, he used forgery to erase mortgage liens from a property, paid for an inflated appraisal, then used a concocted identity to sign for loans far in excess of the value of the real estate.

In the conclusion to The Associates, Cox's hero stuffs a duffle bag with cash, leaves his silver sports car in a parking lot and boards a cruise liner in Tampa to rendezvous with his girlfriend on a Caribbean island.

McKenzie grinned Tuesday as she considered Cox's grand failure at transforming his potboiler into autobiography.

"It was just fiction," the prosecutor said. "And the last chapter, we wrote, not him."

Jeff Testerman can be reached at testerman@sptimes.com or (813) 226-3422.

[Last modified April 11, 2007, 02:42:52]


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