The Bonnie and Clyde of
Are you at risk for mortgage fraud?
They desperately wanted to sell the property, which had been on the market for six months. Dr.
(Fortune Magazine) -- In December 2004, Dr. Bruce Brown and his wife, Bridget, got a call around seven in the evening from a man who had seen the sales listing for their Columbia, S.C., house. He asked if he could come over right away. The Browns agreed.
They desperately wanted to sell the property, which had been on the market for six months. Dr. Brown was starting a new job in Augusta, Ga., in weeks. Just days before, they had amended their listing to offer $201,000 in owner financing, "hoping to broaden the pool of candidates," says Bridget. They did.
Within an hour, a man showed up in a fancy sports car and introduced himself as Gary Sullivan. With him was a petite blond woman he said was his realtor. Sullivan told the Browns he owned a temp staffing agency called Labor on Demand but had run up too much credit card debt and needed owner financing to buy a home. The two cased the traditional two-story house quickly and left. Within days, the Browns had a deal.
At the closing Sullivan was charming and self-effacing, recalls Bridget. He chatted about how great it would feel to own his own home and rebuild his equity, how he traveled quite a bit in his job and wanted to slow down, how he hoped to get married and have a family.
"He said he'd just gotten invisible braces on his teeth. He said, 'When you're as short as I am, you don't have much to work with!' I actually felt a little sorry for him."
Then it came time for them all to show identification, a common practice at real estate closings. As Bridget took out her driver's license, she casually mentioned she'd once been an identity-theft victim. Sullivan "suddenly looked at me, very startled. His eyes actually bored into mine. It was jarring," she recalls. Before she could react, one of the lawyers present shouted, "Sold!"
Four months later the Browns returned from a trip to Disney World to find a chilling message on the answering machine in their new home in Augusta. It was from a U.S. Secret Service agent named Andrea Peacock. Peacock informed the Browns that their old house had been bought by a con man - an exceptionally sinister one who had committed dozens, possibly hundreds, of mortgage frauds and identity thefts, netting millions of dollars.
The man who had seemed a bit of an earnest loser at the closing was in fact on the Secret Service's Most Wanted list. His real name was Matthew Bevan Cox, he was 34, and he used more than ten aliases. Peacock ended the voicemail with an unsettling directive: By no means should they approach Cox, since he was considered "armed and dangerous."
Bruce Brown fumed for five days, and then, on a Saturday, he hustled the family into the car and drove the 78 miles to Columbia. As soon as they arrived at the house's driveway, Bridget became terrified. "I told Bruce, 'You shouldn't go in,'" says Bridget. "I thought, he could be a murderer!"
Dr. Brown, a career military doctor who has "seen it all," according to his wife, got out of the car, told his wife to lock it, and carefully approached the front door. Surprisingly, his old key worked.
Brown stepped inside and flipped on the lights. Cox wasn't there. But there were moving boxes, a new couch and coffee table in the living room, and a huge carton that seemed to contain a large-screen plasma TV. The place certainly looked as though someone were moving in -- and that was part of the con.
The boxes were stuffed with trash, even the gigantic TV box. Everything had been staged to throw off inquisitive neighbors. "It was like something out of the back lot at MGM Studios," says Bridget. In the kitchen they found a fax machine with dozens of pages spilling out. The faxes would turn out to be evidence: falsified mortgage documents to and from dozens of lenders, title agencies, and appraisers addressed to various Matthew Cox aliases.
Mortgage fraud frenzy
The real estate market has never offered such opportunity for graft. Since the housing market started to soar in 2001, mortgage fraud has become the fastest-growing white-collar crime, according to the FBI. Last year crooks skimmed at least $1 billion from the $3 trillion U.S. mortgage market.