Lying to Lenders = Mortgage Fraud

A Florida man has landed himself in quite a bit of hot water for making false statements to banks in connection with mortgage loans. Chad Lazzari of Tarpon Springs submitted falsified mortgage and home equity loan applications to three different banks. In the applications, he indicated that he was single when, in fact, he was married. He also submitted false income tax returns and other inaccurate documents to bolster his financial status. When he defaulted on the loans, the feds came a calling.

Lazzari was prosecuted federally for wire fraud and making false statements to federally insured banks. He pleaded guilty and was recently sentenced to 15 months in federal prison. The court also entered a judgment against Lazzari for the proceeds of the mortgage fraud, $670,982.65.

This tale serves as an illustration about what can happen if you stretch the truth on loan applications and make material misstatements. Federal prosecutors are increasingly prosecuting these types of cases, especially in Florida where property values have fallen because of the recession and, as a result, material misstatements on refinancing and other mortgage applications have risen.

Federal prosecutors usually prosecute an alleged fraud involving a mortgage loan as bank fraud, wire fraud, mail fraud or false financial statements. The crime(s) become federal when a federal institution is involved and/or the perpetrator uses the mail or interstate commerce to accomplish the crime.

Each of these crimes is set out in its own federal statute. For example, the bank fraud statute requires the prosecution to prove:

• A scheme to defraud
• The scheme is designed to deceive a federally chartered or federally insured financial institution
• For the purpose of exposing the financial institution to a loss

If you are facing federal charges for misstatements made on loan documents, it’s important to realize that you may be able to raise a successful defense. For example, to prove a bank fraud charge, the prosecution must prove that you acted knowingly with the intent to deceive the bank. If you can show that you believed the statements were honest and the government fails to prove your intent, you can beat the charges.

If you are facing charges involving false statements on loan applications, our experienced Florida criminal defense attorneys can help determine your best course of action.