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Witness: Farmer Helped Move Money to Deceive Lenders

legalpronews.findlaw.com | April 11, 2014

By John Cox

FRESNO -- A former loan officer at Tower Lending -- the mortgage brokerage of disgraced Crisp & Cole Real Estate -- detailed in federal court Thursday how he believes mortgage fraud defendant Julie Farmer deceitfully used money and straw buyers to secure home loans.

Christopher Lance Stovall was testifying during the third day of Farmer's trial in U.S. District Court in Fresno, where she faces multiple fraud charges related to a huge Bakersfield mortgage fraud scheme led by David Crisp and Carl Cole.

Farmer has maintained her innocence, saying she didn't participate in or was aware of any fraudulent activity. Her attorney has bristled at any suggestion Farmer was part of any Crisp & Cole "scheme" as prosecutors allege.

Stovall testified Thursday morning about two transactions in which he said money had to be deposited into borrowers' checking accounts to convince lenders they had adequate assets to buy homes. He said Farmer was the one who made sure the money was deposited.

Farmer was the No. 3 person at now-defunct Crisp & Cole and the only one of 15 defendants in the case to go to trial.

At one point, Stovall referred in court to a loan application by Leslie Sluga -- mother-in-law of David Crisp and one of the defendants who took a plea deal. It was a 100 percent-financed loan for a property with a first mortgage of $1.275 million and a second of $200,085.

Sluga did not have enough money in her account to qualify, Stovall said.

"I told Julie that I needed the money in the account," Stovall testified. Soon, he continued, "Julie called and told me...that the money was in the account."

The next day, he said, the money disappeared.

"I said, 'Where's the money?'" Stovall testified. He said Farmer told him that Crisp needed the money back. When the lender raised a question about the funds, Stovall said, someone put them back into the account.

Stovall said he later expressed to Farmer that the Sluga loan application bothered him and that he was "getting fed up with all the fraud needed to close these loans."

Farmer's reaction?

"She empathized but said, 'Talk to David about this,'" Stovall testified.

During cross examination, Farmer's attorney, Tony Capozzi, tried to undermine the idea that Farmer had much authority over these kinds of transactions.

Capozzi asked Stovall whether decisions were always made based on what Crisp wanted. Stovall said yes, but Farmer could have fired him.

What would Stovall have done at that point" Capozzi asked.

"I'm sure I'd talk to David," Stovall said.

Stovall conceded he didn't know if Farmer hired people or gave raises or had authority.

The Crisp & Cole defendants were accused of various crimes tied to a conspiracy of defrauding lenders in part by using straw buyers -- including family and friends -- to buy homes at inflated prices, often with 100 percent financing, using falsified loan applications.

The properties were only nominally owned in the names of the straw buyers, the government has been alleging, and controlled by the defendants. The straw buyers typically received up to $20,000 or more for each property purchase while Crisp and Cole and other defendants received the profits from the sales.

Several homes went into foreclosure, something prosecutors say cost mortgage banks about $30 million in losses.

Crisp and former business partner Carl Cole were recently sentenced to 171/2 years in federal prison after pleading guilty to conspiracy to commit mail, wire and bank fraud.

Farmer faces charges of conspiracy to commit mail, wire and bank fraud, six counts of mail fraud, four counts of wire fraud and one count of conspiracy to commit money laundering.

Stovall pleaded guilty in July 2010 to four counts of mail fraud, and aiding and abetting. He is scheduled to be sentenced June 2. Sluga pleaded guilty to two counts of wire fraud in January 2010 and is scheduled to be sentenced May 27. ___

(c)2014 The Bakersfield Californian (Bakersfield, Calif.)

 

 

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