In 2007 the housing market in Florida was booming. Many individuals were buying properties, fixing them up and reselling them for quick profits. At the time some believed that housing values would only continue to rise. This practice known as flipping became one of the major factors causing the impending economic recession that arose in the following year.
Houses were greatly inflated in value and when housing prices made a U-turn and quickly went down thousands of individuals found that they were under water, the worth of their properties now significantly lower than what they paid for them.
The practice of flipping is not an illegal act in itself but in some cases fraudulent practicing of these techniques occurred.
Four men, Michael Chadwick, Matthew Landsman, Joshua Unger and J. Patrick Brester, devised a scheme to defraud lending institutions by leading them to believe that housing prices of properties bought by Brester’s shell corporations, and to be financed through the other co-conspirators were worth a substantial amount more than the rate that they were actually purchased at.
All of the fraudulent transactions included Brester, primarily buying condominium units by way of shell development companies and then simultaneously “flipping” them to Michael Chadwick. To expedite the scheme, Brester and his co-conspirators misled mortgage bankers in reference to the true nature of the deals. They overstated the purchase prices of the properties and, in due course, the amount lent by the mortgage lenders to them. Their method of doing so was by including monetary charges that were falsely described as “management fees”. The fees were made payable to the shell corporations which they controlled. The management fees were actually the method by which Brester and his co-conspirators directed monies back to themselves without the banks gaining knowledge.
In Brester’s trial the evidence and testimony demonstrated that Brester and his accomplices produced interstate wire transfers of the loan’s profits from the victim lenders that were transferred into bank accounts maintained by the shell companies, comprising Landwick I LLC and IGS Inc. Proof was offered at trial that exhibited that Brester turned a profit of more than $550,000 from his part in the scheme. Brester received the majority of the proceeds of the illicit transactions. The amount of money that the mortgage companies lost exceeded $1.3 million.
Chadwick, Landsman, and Unger had already been convicted of the scheme but Brester, 40, of Sarasota, Florida who was characterized as the middleman, had not been indicted until August of last year.
Chadwick has already completed a one-year prison sentence and Unger had been sentenced to 41 months in prison. Although Unger’s attorney vehemently stated that Unger only played a minor role in the flipping scheme it is believed that the Judge dispensed such a harsh sentence because of his prior criminal record. Unger had been previously convicted of three DUI violations, issuing bad checks, and using a fellow volunteer’s credit card from a charity he was a part of in excess of $12,000.00. However, the sentencing judge reserved the right to minimize Unger’s sentence if he agreed to testify against J. Patrick Brester, the final co-conspirator of the wire fraud offense.
Landsman was also convicted and is still serving a two-year prison sentence that began in late 2011. The three men all pleaded guilty to conspiring to commit wire and mail fraud in an arrangement that involved purchasing and instantaneously reselling the condominiums which were located in Sarasota’s Vintage Grand complex at inflated rates. The objective was to profit from the sales by fraudulent means using the quantity of the money the co-conspirators would be able to borrow from banks and subsequently the amount they could receive in what were deemed incentives, commissions and fees, from Brester’s shell corporations that was fleetingly the original owner.
Earlier this month, it was announced by U. S. Attorney Robert E. O’Neill that Brester was found guilty by a federal jury of one count of conspiracy to commit wire fraud affecting a financial institution as well as three counts of wire fraud affecting a financial institution.
Each of the counts carries a penalty of up to one million in fines and a maximum of thirty years in federal prison.
The complete FBI press release can be read by clicking here.
As explained above, the consequences of a conviction for any type of mail or wire fraud can be extremely harsh and can include a term of extended incarceration and substantial monetary penalties. Wire or mail fraud that affects a financial institution has substantially stronger consequences. It is absolutely imperative that if a person is charged with the crime of mail or wire fraud, of any type, to directly get in touch with an experienced defense attorney who can appropriately handle this type of case and apply the strongest defense possible.
If you or someone you know or love is being investigated in connection with a mail or wire fraud charge by the FBI or any other Federal agency it is imperative that you get in touch with a qualified attorney with experience in Federal cases. An attorney who previously worked as a Federal prosecutor and knows how the Federal system works can be a great asset in planning a proper defense no matter what Federal charges are being considered.
Mr. Cohen is a board certified criminal trial lawyer rated AV by Martindale Hubbel (pre-eminent) and a “Super Lawyer” recognized as being in the top 5% of his specialized field (criminal trial law) among Florida lawyers. He is considered a specialist by the Florida Bar in his field. Mr. Cohen has tried scores of cases over his 35 year career and is a member of the Florida and New York Bars. He practices in Fort Lauderdale, West Palm Beach and Miami, among other counties. He is also admitted to practice in the United States Court of Appeals for the Eleventh and Second Circuit.
Mr. Cohen’s practice has recently expanded and he is now a partner in the prestigious law firm of McLaughlin & Stern, LLP. Through this partnership, Mr. Cohen can now lead your defense in the New York Metropolitan area in addition to the Broward, Dade, or Palm Beach County areas as well as all other jurisdictions throughout the state of Florida
Mr. Cohen is also listed in the 2013 edition of “Best Lawyers in America“.