Matthew Cox: FBI Most Wanted Con Man - $55 Million in Bank Fraud | Lex Fridman Podcast #409

She found like, $40,000 in cash in my freezer one night. So she's like, what is going on? You know, and so we have this conversation, and I tell her, look, people are looking for me. Who? Law enforcement. Which ones? All of them. You know, she's like, that doesn't even for what? I go, mostly bank fraud. And she's like, well, how are they not finding you? I mean, everybody, you know, people know you. Like, you know, your general contractor, which I met four months before this guy, six months before this was two months before. You know, she's like, so and so, so and so, so. And I'm like, right, right. Well, I said, well, she's like, I mean, they've got your name, they've got your. I go, well, that's identity theft. And she was like, what do you mean? I said, well, my name's not. You know, my name's not. It's not Joseph Carter. And what is your. What is your name? I go, look, you know, it's. It's. You don't need. Don't even worry about it.

The following is a conversation with Matthew Cox, a con man recently released from federal prison where he served 13 years for bank fraud, mortgage fraud, identity theft, passport fraud, and other charges. He has admitted guilt to all of it. He has written true crime stories of many of his fellow prisoners.

And.

And now he continues this work by interviewing criminals about their crimes on his YouTube channel that I recommend called Inside True Crime. Exploring the mind of a criminal is exploring human nature at the extremes, often in its most raw and illuminating form. And that is something I definitely want to do with this podcast to understand the human mind and everything it is capable of. This is the Lex Friedman podcast to support it, please check out our sponsors in the description. And now, dear friends, here's Matthew Cox. What was the first crime you committed?

The first mortgage I ever did a.

Mortgage is me borrowing money from a bank to buy a house.

Yeah.

How can you find a way to commit crime in this. How can you do fraud in this space?

It's. It's very difficult for the average guy to commit fraud because there's so many safeguards set up. You know, if you were to go in and say, I make $300,000 a year. Okay, well, we want your W2s, we want your pay stubs. We're going to call your employer, we're going to check to make sure your employer. How long they've been incorporated, we're going to check to make sure they're registered. We're Gonna, it's like your whole plan fell apart, you know, because the average guy can't do that. He can't even come up with the pay 7W2. So the average person, you know, or I'm going to put down this much money, but you're going to borrow that money from the seller, you know, okay, well then they start asking for bank statements. Where does the money come from? How long has it been in your bank? Like you can't even have it put in your bank for a day, get a letter, you know, it's got to have been there for 90 days or 60 days depending on the bank. And so there's all these ways for the average person it's very difficult to commit fraud. The average guy that works at Walmart and makes $60,000 a year and he's been there for five years and he saved his deposit. Like it's a very. That's really the guy that those transactions are set up for to borrow a mortgage from bank of America. That's the guy they're looking for.

So to commit fraud in this space, you have to misrepresent some aspect of your identity of how much you're worth, how much money you have. This kind of stuff, right?

You have to be able to lie to the bank. Anytime you lie to the bank, you've committed fraud. And it's funny, when I was, you know, doing it, I would say, ah, it's in the gray area. There's no gray area where you're either lying in some capacity or you're not. So it's for instance, the very first loan I did, I whited out, my borrower had been 30 days late on her rent. So they're really looking at the last two years. So when you go into the bank and most of what they're asking is a two year window, they're saying, how long have you been on their job? They care about two years. And how long have you been at your residency? They're looking for two years now. You could be at three places in two years. That's fine. As long as you consistently paid for two years was she had been in an apartment complex but she'd been 30 days late. Now she caught it up, but she was late. The bank doesn't want to lend you money if you've been 30 days late. So I was a broker and I whited out the 30 day late. I just got rid of it and my manager is the person that told me to do it. She said it'll be fine and she Was right. It was.

What did it feel like? So that was the first fraudulent action you committed?

Yeah, I, I mean, you know, I was, I was worried, you know, I was say, you know, I sweated bullets for four or five days, you know, But I mean, I was concerned and I don't know that I was concerned that I had broken the law. I was concerned because I was behind on my, on my truck payment. I was behind on my mortgage. Like I had banked on being a mortgage broker and I'd gone deep, deep behind on all my bills to do this. So in the last minute when this loan isn't going to close and I have to commit fraud to make that happen. And the idea, my fear was they were going to figure it out and maybe I'd get fired. You know, I didn't think I was going to go to jail because my manager assured me, you're not going to jail. Like they'll, you'll get fired at best. So my concern was they were going to catch it and I get fired and I wouldn't get paid. Like, I needed that money so bad.

So maybe paint the picture here. Where were you working? Who was the manager?

The manager was. It's funny because I, I don't think I ever really mentioned this. It. Her name was Gretchen Zayas. She eventually, I don't mind saying she eventually got. Ended up going to jail for fraud. Her name was Gretchen Zayas and she was the manager. I was working for a company called Eagle Lending and it was in Tampa. And this was like my first month. So my very first deal, three or four weeks into it, into that first month, and I walk in, I put the file in front of my manager. She looks through everything, you know, oh, great, good, good. And put this one piece of paper over here and sat there. And then when she was done, I said, what's, what's going on? She goes, perfect. Files perfect. She goes, but your borrower's 30 day late on her rent. And she says that that's. It's done. She's like, that's a deal killer. And I was like, oh my gosh, you know, what do I do? And I remember she pulled out a white thing of white out. Remember the white out, not the sticks, but the one. And she started going. And I was like, what? She goes, if I was you. And she handed. She's. I'd white it out, make a copy, stick it back in the file. Yeah. She said, it'll be fine. And I went, I could, I was like that. That's Fraud, I could go to jail. And she goes, and she was like, it's, they're never going to catch it. She said, look, we do stuff. I do stuff all the time. She said, they're not going to catch it and nobody's calling the FBI. She was the worst case that, that worst case scenario, if underwriting catches it, then they'll fire you. That's it. Nobody's calling. You're not going to jail. And I was, you know, and I trusted her. I was like, okay. And so I did what she said. I stuck it in the file. And I mean, like I said, for four or five days, I was like, oh, my God, I'm so scared.

How old are you at this point?

Probably 29. I think it was 29. You know, like, I had gone to college and so many things had not worked out. You know, I got a degree in fine arts. It's not, it's not a. There's not a lot of people looking for anyone with a fine arts degree. And, you know, I tried my, I tried to be a, tried to be a, an insurance adjuster. Tried that for about a year, year and a half that didn't work out. Ended up, ended up working construction for a few years. And, you know, so finally the girl I was dating said, you gotta be a mortgage broker. You know, she just had, just started as a mortgage, in the mortgage industry. And she was like, you have to do this. Like, you were born to do this. This is perfect for you.

What does she see in you?

She said, just, you're a salesman. And I was like, Because I was like, you know, I barely balanced my checkbook. Like, I don't, I don't know anything about numbers. And she's like, it has nothing to do with that. It's sales. It's putting together deals. You know, you're good at that, you're good at negotiating. You're, you know, you're a natural sales salesman. And I figured I, I need to try something.

So what aspect of mortgages is sales and deal making and what aspects require the charisma that you clearly have?

Well, one, you've got. You have clients that have lots of options. They can go to bank of America, they can go to SunTrust, they can go to Chase. They have options if they have perfect credit. I ended up working for a company that was a subprime lender. And those people didn't have a lot of options by, Honestly, by the time they got to that, to Eagle Lending, that their options were over. So what ends up Happening is you're negotiating with sellers. You know, you would think that a lot of the stuff that in that industry that real estate agents should do, you know, the brokers end up doing because real estate agents are, are used to you meet them at the house or they take you to several houses. They, you know, they, they open the door, they walk around, they write up a contract that's legit, a legit contract. And you already, you're already pre approved, everything works out. But subprime, that's not the case. You got borrowers with horrific job history, they don't have enough of the down payment. They can't, maybe they have the down payment, but they don't have the closing cost. So you have to go to the real estate agent and say, listen, I need you to raise the purchase price and have the, the seller pay the closing costs, which is legal. But that's not to a degree, but that's not how they wrote the contract. So now you're having to get them to rewrite the contract or you're have your, you know, there's little things you're trying to do and the more, the more deals you get done and the more you deal with certain real estate agents, the more you start to realize that their, you know which ones are completely above board and which ones are willing to twist the rules.

And a lot of it works on personal relationships.

Right? Right. For some reason people tend to like me and trust me. I don't know why it hasn't worked out for so many people, but people naturally seem to trust me. And so if I say, hey, I can close the loan, but you got to do this, it'll be cool, don't worry, we do it all the time. It's like my third loan and you know, I don't, I've been doing this for years and they go, okay. And then they raise the purchase price, they add some money, they have the seller of the house give the borrower some money, they stick it in the bank or they put it in the, in escrow at the closing company. Like now you're starting to massage deals.

What was the second time you committed a crime? So what, how did it start to.

Evolve from the white out when that went through? You know, I, I think a normal person probably would have said wow, it was a one time thing, got away with it, I'm good. But for me it just emboldened me. Like I just got a check for like, I don't know what it was. 25, $3,500. I was thrilled. And by that time, I was already working on another deal. But that guy, he made. I forget something. Like, he had made, like, let's say, $45,000 the year before in his W2. If you. Based on his. Based on his current track record or his year to date of his pay stub, he made just enough money. But if you factored in last year's W2, he was shy. So if I change that 45,000 to 51,000, then he could. The loan closes. I get a check for 3,500 bucks. He gets into a house. I'm doing him a favor. You know, I'm doing God's work. So I fix it. I kick back. I'm terrified a little bit, you know, worried about it. Sure enough, it closes. Four or five days later, they call me. He's ready to close. A week later, we close, I get a check. Next guy that comes in, I mean, I got very, very quickly. I was concerned. Do you have a house? Do you have a deal? Is it ready? I can get you done. Now, if you were in bankruptcy or something, there's some things you just. You'd pull their credit, and you just couldn't help them if they were. If they had a 550 credit score or something and no job. I mean, you know, it had to be within reason. But very quickly, it was changing W2s, changing pay subs, changing appraisals, you know, fixing verification, like I said, verifications of rent. So it evolved very quickly for me.

And you're essentially helping people. That's what I told myself, Giving him a chance. People that have been really struggling financially in life. So you've been telling yourself that this is. You're doing a good, good thing for people.

I told myself that right up until. That those loans were solid, and I was helping those people out right up until I went to prison and. And I was in prison, and I had to write. The government asked me to write an ethics and fraud course for. To help teach the nation's mortgage brokers. You know, all loan officers and brokers have to take. I think it's nine hours of continuing education every single year. And I was approached to write the ethics course. And it was about that time and about the same period of time I was writing. Writing a book, my book. And that kind of you. I started reflecting on what I had done. You know, the truth is, like. And this is a horrible thing to say, because the first time I ever heard somebody say this, I remember thinking, oh, that's a horrible thing. To say some people should not own a house. They shouldn't be allowed to borrow. They're not in a position financially, you know, and there were, there were many occasions where I put someone in a house that they 100% swore they could afford. It was, I was helping them. I told myself I was helping them. And a year and a half later, they're going into foreclosure, Their stuff's on the corner, they don't know where to go. And the truth is, is that I, I'm not smarter than the actuaries that came up with those underwriting guidelines.

So in this whole process, how are you making money? Are you taking a percentage?

Yeah, I charge a broker fee. Or you charge yield spread. So yield spread is, let's say the interest rate is 8% interest. If I charge them 25 basis points over the 8%, so I charge them eight and a quarter, you know, 8.25, then I get 1% of the loan back as a fee. So if I charge them eight and a half percent, I get two points back. So if it's $100,000 piece of property, and the bank says your interest rate is going to be 8%, and I tell you 8.5, and I'm charging you a $3,500 broker fee, now I'm making $5,500. So on even a hundred thousand dollar loan, you could make a nice chunk of change. I mean, it's.

So how much gray area is here? You said that there really isn't when you're lying or not.

But I mean, you're.

It feels like there is.

Well, every time I change something, it wasn't gray area. I just committed. I just committed fraud. At this level, you're either, you either meet the guidelines or someone has massaged it in such a way that they've committed fraud. That's it. There's. Now, there's, there's tons of ways where you can commit fraud and they just can't figure it out. Does that make sense? Like I, I mean, I've. You've committed fraud. And it's like they've look at the entire. They look at all the documents and they double check everything and they know there's fraud in here. They just can't find it.

Just because they can't find it doesn't.

Mean, doesn't mean it was. Exactly. Doesn't mean it wasn't fraud.

As part of this, you did a lot of fascinating things. One of the things you did, you talked about creating synthetic people, meaning creating fake identities. What does, what does it take to do that? To do that?

Well, so your credit profile is made up of your, you know, your, your at, your name, date of birth, your address, and you know, your Social Security number. And you know, those are the kind of, you know, and then there's other things where you work, that sort of thing. But what people don't realize is there's so many people out there that think that the credit bureaus already know who you are. Right. But the truth is the first time the credit bureau has ever heard about you was when you told them the first time you applied for a credit card, you, they created a credit profile at that moment. Prior to that, they had no idea. So the first time you apply, you give them your, your full name, date of birth, Social Security number and your address and they create a credit profile and they say, hey, no record found of this person. He has no credit, nothing probably got denied. Well, what I realized through the course of, because eventually I end up leaving that one company and I opened my own mortgage company. When I opened that mortgage company, I was, I was on the inside. Does that make sense? Like I wasn't a, I wasn't just a broker that was sitting out with everybody else and would periodically come in and ask questions or would call underwriting and, but really didn't understand what was happening and what, exactly what the underwriting guidelines were. Now I was actually talking to the underwriters and you're, you're talking to the, to the owners of the lending institutions and the banks and you're talking to all of the account executives. Now it wasn't just Eagle Lending I was talking to. There were 40 different account executives coming in on a weekly basis trying to get us to sign up with their lender. And they're on the inside telling you, coming in, showing you programs and saying, look, if your borrower is, you know, self employed, we don't ask for this or this. We just ask for them to say they're self employed. Like liar loans. You've, you've heard the term liar loans, okay. Or no doc loans where they don't ask for any documentation. If he's got over like let's say a 700 credit score and he says he's been a plumber and he works for himself, then he's got over a 700 credit score. He just has to say he's worked for himself for over two years and they don't ask any, they don't ask for any documentation. He's got the money in the bank he's got a 700 credit score, says he's been on the job for two years. He's self employed. We're going to raise his interest rate by 1%. And, and he's got, you know, that's it. He's, he's got the loan. So. But you start to, you start to know how things work because I hired a bunch of brokers to work underneath me. And when they would get caught, I would get the phone call. So I get the phone call from the owner of a bank or a lending institute, you know, a lender. And that lender says, hey, Matt, we got a problem. I'm like, what's up? He's like, he's like, listen, we caught a fake W2. I'm like, what do you mean? Yeah, your, your broker so and so sent us a file and this person had. There's two fake W2s, and we're assuming the pay stubs are fake. And I'm like, are you serious? How did you even catch that? And they go, oh, well, here's what we did. We checked with SunBiz.com, you know, SunBiz.gov, which is the Secretary of State's website that registers corporations. And we checked and the tax ID number didn't match. And now I know every W2 has to have a matching tax ID number for whatever corporation issued it.

So there's a sequence of checks they do to detect fraud on different documents, like W2s.

Right.

And then you're slowly learning.

Slowly. Yeah, exactly.

What's the process for that?

Detecting. I mean, I had a pretty good understanding anyway. Yeah, but so I'm starting to learn.

Someone says, understanding. Yeah.

So I'm putting these things together and I remember one time I had a woman come in and she came in and she had perfect credit. She had like 750 credit scores. I mean, it was perfect. And she came in and one of the brokers came in and said, hey, man, he's. Can I show you something? I was like, yeah, what's up? He goes, look. He said, I've got this, this woman's W2S here. I said, okay. I looked at him and he goes, here's your credit report. And he goes, here's the, you know, application. This is the, this is the Social Security number. I went, all right. And he said, this is the Social Security number on the W2. And I went, okay. Keep in mind, you go to get a car loan or credit card, they never asked for these things. So. And he was like, I'm really shocked he even noticed it. I probably might not have even caught it. But he, they were different. And I went, really? And he goes, yeah. He said, so I did, you know, she just brought him in, you know, she's here. And I was like, oh, bring her in here. So she came in, sat down and said, listen, here's what we just found. And she was like, oh, okay, you know what, I don't want the loan. I go, no, no, no, no. I said, listen, you're getting the loan. You got a 750 credit score. Like, I don't care what we have to do, we're getting you the loan. I just want to know what's going on. How did you get 750 credit scores under this Social Security number when clearly this is your real Social Security number. You've been working for this company and your credit profile says it's only like three years old. And I was like, what happened? And what she told me she did was she had been, she went through a divorce. She had been married for 10 years, use her husband's, I mean his surname for 10 years. So she has no credit under her maiden name. But when they got divorced, she switched to her maiden name because when she pulled, tried to get anything in her, in her husband's surname, it was denied bad credit. So he had bad credit, their credit went bad, so he switched to her. She switched to her name. And a friend told her if she needed to get her electric or anything turned on, she could use her name and use her daughter's or son's Social Security number. Which was like a four year old kid.

Yep.

So she used that and it went through. She had to put a deposit down, but it went through. At least wasn't denied. So that went through. Then she went and she applied for an apartment with that. Sure enough, it went through. She had no credit. But they said, you don't have bad credit. So she said once she moved into the apartment, she then started getting these pre approved credit cards. So she, she goes, but I knew I had applied there using my credit son Social Security number, let's say. So she started filling those out and sure enough, she got a credit card and then she got two. And then she got a pre approval from Ford Motor Credit. She went and got herself a new car, got approved, she'd been making the payments ever since. She has 750 credit scores. She thought she'd try her hand at buying a house in his name and his Social Security number. And we caught it and she got a House in that name. And we, we closed it. I just was like, wow, like, this is great.

Ask you a question about that. We. Because it seems like she's able to pay for everything, right? So while this is highly illegal, is it unethical? Is it like, it's, it's unethical in that it's messing with the system on which a lot of people rely. But it feels like there's some aspect of the system that's broken in that it doesn't give people like her a second chance.

She could have claimed bankruptcy and then two years later, listen, two years out of bankruptcy, you can go into bank of America and get a conventional mortgage, assuming you have perfect credit outside the bankruptcy, you have the down payment, you make enough money, there's a whole bunch of, you know, a bunch of underwriting guidelines you have to meet. But that's possible. But you're right. For instance, she wasn't getting an apartment using with her bad credit. She wasn't getting her utilities turned on. She wasn't getting any of those things done.

So getting your life back on track is just harder.

It's extremely hard.

So there's a temptation to take the shortcut, and the shortcut is often going to be illegal.

Right. And she stumbled into it, but she basically explained it to me and I mean, I don't think she had walked out of the, of my brokerage office before I went. And I just started making up, you know, names and I think I went, I went into our file cabinet and grabbed some people's 1040s, which we had, you know, their tax returns and looked up children's Social Security numbers and just grabbed some random kids Social Security numbers and their name and went and pulled them and sure. And you know, but I changed their date of birth to be an adult, pulled it, and sure enough, it came up, no file found. You know, it didn't say fraud alert or fraud or anything. Didn't say mismatch this mismatch that didn't say anything. It just said, you know, no file found. Well, then we went and we pulled, applied for a couple credit cards using a child Social Security number. And then we went and pulled our own credit report and sure enough, it didn't say, no, no file found. It just said that there had been two inquiries applying for credit cards. So I was like, wow, like that's a credit profile. So that turns into me going to Social Security and calling or calling Social Security and trying to get them to issue me Social Security numbers to adults that had never had A Social Security number issued to them. I need to get Social Security number to give me a clean Social Security number. But I called up and of course, you know, I'm a novice. I don't really know what I'm doing. So I'm, I call up and I say, hey, Yeah, I was, I'm never had a Social Security number issue. And they were like, how old are you? And I was like, I'm 31 years old, you know, and they were, yeah, that's not possible. Do you have a driver's license? Yeah. You have a bank account? Yeah. You have a Social Security number? Bring your driver's license in and we'll, we'll pull it up. Okay, well, that's not going to happen. Hang up, call back. Hi, my son is 7 years old or 3 years old, and he, he had never had a Social Security number issued. Oh, okay. Was he born in a hospital? Yes. Well, he has one. He has one. Go ahead and get your son. Come in here. No, I'm not doing that. Hang up, call back. So I called back probably 10 times, and eventually someone said I kept altering it, kept altering what I was saying until I got to the point where I was saying my son was born with a midwife not in the hospital. And the pediatrician told us that we needed to go, we needed to get Social Security to issue a Social Security number. And they would say, well, he should have issued it. But that does happen sometimes. So bring your son in and we'll, you know, you can fill out the paperwork. We'll have one issued. You know, first we'll check to see he never had one issued, and if he hasn't, we'll issue one. And so then it turned into, my son is out of the country and I need this. And then that turned into, oh, I'm sorry, well, how old is he? I was like, you know, he's three. And they go, well, I'm sorry, if he's over the age of 12 months old, he has to come in, hang up the phone, call back, my son is 10 months old, he's out of the country, born with a midwife, never had a Social Security number. And then they go, oh, okay, that's fine. Just get his birth certificate and a shot, his shot record, and you can come in, fill out the paperwork, we'll issue you a Social Security number. And that's what I did. So I figured out how to create a birth certificate. You know, I ordered the security paper. You know, when. Where you make a copy says, you know, void if Copied. So I ordered. Had to order a bunch of that. And I went online and figured out how to make a fake birth certificate. It was great too, because, like, the county actually, they give you a blank form and then they actually show you what it looks like filled out. Like a handwritten one filled out. So I knew if he was born this day, he got these shots. Two months later, he got these shot. Six months later he got these shots. So I just filled it out. I even had to order a. A seal. So you have to have a seal that says like, Hillsborough County Vital statistics or Richland County Vital Statistics or something. And I couldn't get anybody to make that. So I changed it to like Richland County Office of Virtual Records. And then I took like 220grit sandpaper and hit it over and over and over again to wear it down. And then I state, you know, I did the embossment on the, on the corner and, you know, I printed it on the security paper, embossed it. Nobody looks at those things. You can see Richland County. You know, you could. You could kind of see that and that really, they just grab it and they go like this. This is what you realize after you. When I started getting started getting driver's licenses issued by, by the state dmv. Right, the state. I figured out eventually it was easier to just go into the DMV and have them give me a driver's license than actually make one. So. But you notice they would just grab the thing, they feel the form and go, okay. Like, they don't even look at it. So. Which is upsetting if you put as much work into these documents as I am for them to go, okay, yeah, that's good. Sit over there. I felt like going like, hey, bro, like, take a look at this. This is artwork.

Yeah, but they're looking for the low hanging fruit of crappy fraud, right?

Yeah, this stuff was right through.

So, okay, so. So birth certificate gets you a Social Security number. So it's. It's interesting because you've also, you've done a lot of different approaches to creating synthetic people. There's homeless people involved. So sometimes it's grounded in real people or real names. And then you're right, like, some part is fake, some part is real sometimes. And sometimes it's completely all fake, right?

Because now I have the name, I have the Social Security numbering. What's great is they mail you. What's even better is you get. Then you get to pick whatever name you want, you know, because when you pick your Child's name. He doesn't even have to have your last name. You pick any name. So I would pick a name and I just say, oh, my wife's last name is this. If they question it, which they never did, but you know, I've got a Social Security number. And then I would go apply for credit cards and I get denied, of course, but they would all offer me a secured credit card. So I, I then fill out the secured credit card and I send them, send the bank the money and they would give me a secured credit card for $500, $300, a thousand, whatever it was. And then once you start making the payments, I pulled the credit and a credit profile shows up saying that this 31 year old man with the Social Security number that I know was issued, you know, a couple months ago has three, three credit cards, they don't even say secured, they just say there's like this credit card is $500. It was issued by bank of America. This one was issued by Capital One, this one. So I've got three of them. But I had no credit scores. So at that point I kind of kicked back and waited. I just kept making payments. And I remember thinking to myself, I'll bet you they don't, that the credit bureaus don't generate credit scores for at least a year. And I was like, God, this is going to be a year long process. And while that was happening, I started other, I was starting other ones because I figured at least in a year I'll have a bunch of these secure, you know, these, we call them like phantom borrowers, but now they call them synthetic identities. So at least I would have these synthetic identities and maybe I'd do something with them. But what happened was at six months I went and I randomly pulled the guy's credit, you know, the person's credit, and 705 credit scores. 705, 701, 695. I was like, oh my God, you only needed a 620 to borrow to get a 95 loan from the bank. So I was like, oh my God, this is in, this is amazing. Sure enough, a month later, the other ones I had started all of them, bam, bam, bam.

So what do you do with a phantom borrower? Like what, how do you make money on this?

So I think most people, if you were just like a scammer or fraudster, you would probably just get credit cards and maybe build up that history or maybe try and borrow a personal loan, which is limited, you know, it's Personal loans are used to be. You used to be, you could go to an FDIC insured bank which borrows money. Those, you know, the personal loans, they lend out at the max, $15,000, you know, so you could do that.

So you can go through this whole process of creating a fake identity, getting a card, paying it off, building up credit, and then you get $15,000 at.

The end or right, you get 15 maybe, you know, if you want to keep making the payments, you know, if you could wait a year, you could probably get 15,000. Maybe you could maybe get 20, 30,000 and a bunch of little smaller ones, you know, get 7, 500. Because I did. I know there's a $7,500 from Citibank, you know, $5,500 from American General. So you maybe get what, 25,000, you know, maybe 30,000 in personal loans. Maybe you can, you could, you could then apply for. You can maybe get another 20 or 30,000 in regular credit cards, you know, 10,000 here, 8,000, 5,000. And then you go to the lower department store cards and you go to Home Depot. You get a, you get 500. So it ends up being maybe you can get 50, 60,000, maybe if you really good, you could get up to 80 or $100,000 in credit cards and personal loans if you really knew what you were doing. But per person, per identity, Per identity. But I had the ability to leverage that, perfect, those perfect credit profiles against properties. And I mean, ultimately that's what I end up doing. And so each one of those identities was worth, you know, a few million.

Can you explain how that works? So to leverage them against property. So how does that work with a mortgage?

So what I did eventually, I mean, this was like, is down the road, but, you know, I mean, at this point, when things are just. My whole life had kind of gone off the rails. I was on federal probation. And so what I did decided I was going to do was start running a scam, a much larger scam. And what I was going to do was I was going to start flipping properties, right? Like buy houses cheap, fix them up and sell them. There's an area of Tampa called Ybor City. So I was going to start flipping houses in Ibor City. And you know, I thought, okay, I can, I can buy these houses for. You could buy a really crappy house at that time for 50, $60,000, let's say 50, and then you could put $25,000 into it in renovations. You could renovate it for 25 and maybe you could get an appraisal for 100. So I thought what I could do is I can buy these houses, renovate them and sell them to regular people. But I also had been working on the synthetic identities and then I thought, well, or I could just sell them to synthetic identities and then I wouldn't have to dump 25,000 into it. Right. And these guys are perfect, they have perfect credit. I can provide W2s and pay stubs because by this point I'm manufacturing businesses. So I've got, I've got, I've incorporated businesses, I've got websites for the businesses, W2s pay stubs. So these guys have, these guys look perfect. So I figure I'll buy these properties for 50,000, sell it to these guys for a hundred, maybe I'll pocket 40 or 50,000. I don't really have to do anything. But that seems short sighted. So I thought would be even better is that if I did a little bit of renovations and then I sold it for much higher, maybe I put 10,000, clean up the outside of it. Because these guys don't care what the inside of the property looks like. You know, they, they're not, they don't exist. So. And then I, but I can't. How am I going to get an appraisal for a hundred thousand dollars? Well, do you know how appraisals work? Okay, so the bank sends an appraiser out or at that time you could provide an appraisal. They can review it. So they'll do what's called a desktop review. They review it, they review it on, on the computer. They never go out to the property or they send someone out, they call that, you know, it's like a field review. They send someone out and they just look at the house. They don't go in it though. So I have to clean out the, clean up the outside of the house. So what I did was, but the problem is, is if your house is, you're trying to sell that house for let's say 200,000, the other houses, they have to pick three comparable sales in the area that are also going to support a $200,000 sales price. Well, there's no other houses selling for 200,000 near this house. So I thought if I want to get these things appraised for 200, 250,000, I have to have comparable sales and that appraisal is going to be reviewed. So what I did was I started, I went out and I bought this house for 50,000 and I recorded the sale at 200,000. So when you buy a house for $100,000, you pay $700 in dock stamps. But if you pay an extra 700 bucks, the sale shows up for 200,000. I'm buying these things for 50, so I'm paying $350, and I'm just paying an extra $1,050. So I'm. So it ends up being $1,400, but the sale shows up at 200,000 on a house that's a crack house I bought for $50,000. Now I go, I trim the trees, we mow the yard, we clean up the porch. We put the porch rail on, maybe we paint it real nice. We black out all the windows. You can't see inside, but from the. From the curb, it looks great. And I get an appraisal. So I do that with that house. I do that with another house, all within a mile. So I buy four houses, knowing I could use the all. There's a subject and three comparables for all of them. So the first thing I did is I bought four houses for 50,000, 60,000, 40,000. And I recorded the values at, you know, 210, 200, 190. So I get an appraiser to come out there. He appraises it. He said, of course, he says it's horrible, but there's comparables here. Now, of course, it is in bad shape, and he says it's in bad shape, but I go ahead and I correct all that. So I correct it. So now if you review the appraisal and you're in California, or even if you drive your car down, the appraiser comes to the house and looks at it from the street, it looks fine. But the truth is, I've got $60,000 into this property, and you're appraising it for 200,000. So the bank's ready. They're not going to lend 200, but they'll lend 190. So the bank is ready to lend this synthetic borrower $190,000 on a house that I have 60,000 in. So I walk. So I schedule a closing, and we close on the house, and I walk away with $60,000. You know, and the thing is, like, the problem was, is by the time I got to this point, I knew so many people in the industry. I. Nobody had to really, at that point, show up. Although I've had people show up for the synthetic identities and sign for them almost all the closings. Nobody ever showed up. I just showed up and said to the Title to the title agency and said, hey, my borrower, he's at work right now. He can't make it. Can I just take the file and I'll have him sign all the documents at his work and I'll bring him back. He's like an hour and a half away from here. I'll be back in two or three hours. They're like, oh, wow, man, Matt, thank you so much. And they would give it to me, and I'd go sit in the parking lot and I'd sign all the documents, wait an hour or two, and I'd come back in and say, here you go.

How are you able to keep all this in your mind? Because you have to not slip up in any of these conversations.

It's pretty easy for me to. For me to keep them. Everything in the correct category. Does that make sense? Like, it's. It's. I'm not great at a lot of things, but this I was very good at. But.

Well, there's these phantom people that exist, and they were becoming real people in your mind. As in, like, you're able to tell good stories with. With those people. Right. Like, because if you're talking to the appraiser, if you're talking to the. Everybody involved.

Well, keep in mind, the appraiser almost never meets the Borrower. Never. Not even. Almost. Like 99.999% of the time, they never meet him.

But you have to talk about them.

Yeah.

So I guess what I'm asking is you're able to converse fluently about these synthetic identities.

Yeah, they. They all had different jobs. They all had. All the jobs were basically. They were all on the job for five years. They were all. It was. A lot of it was.

There's a template.

Yeah, exactly. But. Got it. Yeah. Listen, all matter of fact, almost every one of them had the same birth date. You know, so. Because I, you know, who knows? There's. So. Yeah, it wasn't difficult. And keep in mind, a lot of the brokers barely ever meet the bar. They call in on the phone. But it didn't matter anyway, because I'm walking in saying, I got a slam dunk deal for you. And they're like, oh, wow, Matt, you got the W2s, the pay stubs. You've got all the. You got all their rental history. You have everything done. It's perfect. Thank you so much. They're happy to do it. Hey, I print up the docs and I'll have them go sign it. Great. Wow. Thank you. You know, assuming they didn't already know about it. And almost everybody involved in this by the time I was done was involved. There's probably 15 or 20 people that all knew what was going on.

The full of it. They knew the full depth of it.

Yes. Yeah, yeah. Maybe not 100% everything, but they definitely knew this is fraud and they were.

Still going along with it.

Yeah, yeah. Keep in mind that even when I give you an example, one of my, you know, let's say this happened with almost all of them was he would buy five houses. So the guy, what happens, the basic design was I buy the houses, I record the values higher, and this person buys all five houses, refinances them, he ends up borrowing a little bit over $1 million in his name. Then of course, then I go and I, I get personal loans from several banks, I get credit cards, I run up all of his credit cards. By this point, I've got 10, $20,000 worth of credit cards in the guy's name. So the guys are all worth like a million, million and change. Well, once I stop paying, you start getting letters from the collection companies, right. From the banks, you know, and then they sell them off. So after about three months, you're getting tons of letters. And what I would do is I would take my borrower's name, I would go online and I would find, or I go in the newspaper and.

I.

Would find an article about, let's say like a 12 car pile up, you know, so there's, you know, a huge accident on i4. It's very dangerous. So there's a 12 car pile up and someone in the accident was life flighted to Tampa General Hospital. I would cut and paste that article and I would just insert my borrower's name into the article saying that, you know, Brandon Green was life flighted to Tampa General Hospital is currently in critical condition. I would then print that article out on newsprint. I then make a copy of the, cut it up, make a copy of the newsprint, highlight his name, and I would write a letter from Brandon Green's fictional sister to the collection companies saying, several months ago my brother was in a horrible car accident. He is currently, they've got the article, they have the highlighted name. He clearly was in, in this, in this accident. He is currently in a coma and the doctors say even if he wakes up from the coma, he will never work again. That, you know, so you might as well just foreclose on, stop writing us letters and take the houses back. And that's all they're looking for. Is, is, is a reason at this point. Even if they look into Brandon Green, they can't figure out if he's a real person or not because he's got a Social Security number, he's got. And everything went bad at the same time. He's got multiple rental properties or his primary residence. All of his credit cards went bad. Everything went bad. We have an excuse, we have a letter. That happens. People get divorced, they lose their job, they get an accident. It's reasonable.

When they look into it all looks legitimate.

Even if they ordered another appraisal, by this point, it's not four comparable sales or three or four comparable sales. By this point, it's like 10, 15, 20, 30, 40, 50. Because I kept making more and more of these guys.

What was your. Just almost like a tangent. What's your thinking process? There's a lot of cleverness going on here. So like the, the car pile up as a solution newspaper and you mail it. Are you sitting there alone and thinking through this? Like, how do you come up with that idea? It's a very interesting, a very clever, innovative idea.

So at first I, I thought about making like a fake death certificate. He died, you know, but I thought, I don't know, like, what if, you know, like some of these places had like, you know, you know, primary mortgage insurance. Like, what if the primary mortgage insurance, like, what if they try and claim because he was dead? Or like, I don't know, I don't know that side. So I'm like, I don't want to do that. I want to do something that's semi verifiable and third party. It's like a third party telling you this is what happened. I thought, well, like the newspaper, you know, and, you know, or do I claim bankruptcy? And I've done that. I've gone and got the bankruptcy forms, right? You can go to the bankruptcy court and they'll give you forms to mail to all of your creditors. And you mail them, they stop contacting. They wait to be located by or notified by the bankruptcy court. But my fear there is, you know, nobody's ever going to notify them. Like, I'm not going through bankruptcy for one of these guys. So it was like, this is a, this is a better bet than just writing a letter saying, I'm going through a divorce, my wife's keeping those houses, that's her problem. You know, you could do, there's lots of things you could do. But to me, this was, they're not going to try. And how do you, how do you shut it down without him dying. How do you shut that down? This is how you shut it down. He's in a coma. He'll never work again. He was in a car accident. Here's the proof. He can't even write you. I'm his sister. I wrote you the letter.

It's a one time letter that seems to tie up all.

Exactly, exactly. You know, I don't know the exactly how that, you know, what sparked that as much as there were so many other avenues that I could have gone that I was, I just didn't know.

But you were thinking through all those different avenues.

Yeah.

Are you mostly thinking alone?

I mean, you know, I had guys I was bouncing ideas, ideas off of. There were other guys that were involved in the scam. You know, everybody. I think that scam ended up making, like the FBI said it was like eleven and a half million or something. And, and you know, but, but there were so many other people that were involved in that scam that were, you know, this guy's getting 50, this guy's getting 20, you know, 17,000, 20,000, 25,000. And you know, we're just doing it constantly. And so the bank would foreclose on that property, they'd take it back, they put it back on the MLS, they put it back on the MLS for 100, for 200,000. It wouldn't sell. Then they drop it to, you know, 150, wouldn't sell. Then they drop it to 125, 130, wouldn't sell. They drop it to 90 and somebody buy it for like 90. It wasn't worth 90, but by that point, that whole area had, we'd done so many houses at that point, the whole area shot up. And the, the FBI said we did 109 houses. I don't think that's true, but we, we. When I end up leaving Tampa after that scam falls apart and the FBI shows up, Forbes came out with an article, whatever, six months later, and they said that the Ybor City zip code was one of the top 20 fastest growing appraising areas in the country. And you know, everybody was like, oh, that's mad because this place is a dump. Like this is a horrible place. Like this is. And I remember one time I had talked to a guy, you know, years later, and he was like, oh, all the comparable sales have dried up. Like when you left, there was just nothing even close to 200,000.

You mentioned right before telling the story of this elaborate scam that you were on federal probation. How did that Happen.

So I mentioned that I owned the mortgage company.

Yes.

Right. So I had started a mortgage company. I had maybe a dozen guys working for me and there was fraud. You know, like I would say it wasn't all fraud, but whatever, 60, 70% of it was fraud that was going in there. And from the outside of that business, it looked very legitimate. You know, we were an FHA approved lender. We were a VA approved lender. We did conventional, probably signed up with 40 or 50 subprime lenders. But there was a considerable amount of fraud. And you know, it kept getting, you know, it became a game. Right? You know, it, you start. I started getting just more and more creative. Like, like I said, every time I would get away with something, like you become emboldened by it, it's like nice, you know, like, hey, the underwriters looking for this and looking for this. And you sit there and go, man, so that she's, you know, that's. What am I going to do? What am I. You know what we could do? We could create or create our own bank. What? Yeah, here's what we're do. We're going to go on, like, how do they know if this bank exists? These people are in California, they're in New York. Like they don't know. So what we're going to do is we're going to go online. Keep mine. This is 2000, you know, this is 2000, 2001. Like, this is. The Internet's in its infancy still, right? So we figure out, I remember GoDaddy, I think, had just come up with a site where you could build your own website. Like, how cool is that? So I go online with a buddy of mine and we create something called the bank of Ybor. You know, we cut and pasted things that we like from other banks and we got a 1, 800 number you could call or a 186 number, whatever it was, and you could call it and it would go to a voicemail. And so we set up this bank and then I ended up making bank statements, which by this point I already had been making bank statements to prove someone has their down payment. Because a lot of times people, they have good enough credit to borrow 95% or 90%, but they don't have their down payment. So we'd raise the purchase price high enough to cover their 5 or 10% down payment and we would bring their down payment for them. Or we'd have the owner of the house bring the down payment for them and then we would have a Check cut out of the closing statement to a construction company that I owned and we get our money back. So they get into the house for 100% financing or 110%. Some turned into 130. We want to pay off their car, give them an incentive to sign. They don't still have the money to buy it. So we're doing all kinds of insane things. Well, at some point, remember Gretchen Zayas, my, my old manager, the original. Yes. She came and worked for me for a short period of time. And then she and her husband went and opened their own mortgage company, which you should have known it was going to be fraudulent from the get go because it was called Creative Financing. Cfm. Creative Finance. No, Creative.

Creative was in the name.

Yeah, yeah, Creative was in the name.

So it's really on the nose.

So she's doing very well. And we became very close, by the way, where we go on vacation, went to Puerto Rico together. I got married at the time. I got, I was married. Our kids, you know, play together, we babysit, we go to each other's parties. We're close, we're good friends. And she's got her own mortgage company. She calls me up periodically and asked me, hey, can you make a W2? Or hey, can you make me a pay stub? Sure, no problem. We're friends. That's what fraudulent friends do. So, you know, if I needed somebody to verify rent or verify somebody's rental history or employment, she had cell phones, she would answer that sort of thing for me. Well, what ends up happening is. She gets in trouble. She starts doing fraudulent loans for some guys, you know, and these guys are doing what's called a cash back scam. So they're, they're getting like a half a million dollar loan on a house that's worth $300,000. So they're getting a, they're buying the house for whatever, 600,000. It's really only worth 300, 350. But she happened to be in an area where she could get it. The appraisal jacked up. So they, they buy the house, they get two, $300,000 back. And it's a straw man scam, right? It's a cash back, straw man scam. So this is a real person that's buying the house. He's got perfect credit, but he's willing to let to ruin his credit to get a couple hundred thousand in his pocket. So he never has any intentions. So it's not a synthetic identity, it's not a stolen identity, it's a Straw man. He's a fake kind of a. Not a fake person, but he's just a straw man. He's a stand in. So he stands in, he signs the paperwork, he buys the house. They end up getting 2, 300,000. Well, this guy buys like five houses, so it's a 2, $3 million. They've lost 5, 600, 6, $700,000. And these guys never even make the first payment. They just let them go into foreclosure. So the bank immediately investigates and realizes this is fraud. So the FBI comes in, they grab Pete and Gretchen. She has to hire an attorney, of course, and she doesn't get thrown in jail or anything. They just come to their office, and they. They tell them they're investigating them. They know what's going on, and they. They want to talk to. They're like, well, look, we want to talk to you, and you're going to be indicted. Okay? So she comes to me. Well, actually, Pete came to me and said, look, man, can you refinance our house and get a 75,000 out to pay our attorney? I said, no problem. Gretchen gives me W2s pay stubs. Fake. The whole thing's fake. I get her. I refinance. I get a second mortgage on our house. $75,000. They pay their attorney. Their attorney immediately says, you need to wear a wire on this guy. Like, he just got you $75,000. You know, I don't know how you got $75,000. The attorney knows something's wrong because the attorney's like, they just. Your whole mortgage company was just shut down. There's no way you could borrow $75,000. So he's like, this. This guy's doing fraudulent stuff. And she says, yes, of course he is. And he says, you need to work with the FBI. Wear a wire against this guy. So she calls me one day and says, listen, I got to talk to you. The FBI is asking questions about you. And I go, what? And she goes, yeah. I was like, meet me at a pizza place down the street. So, you know, don't come in my office, because everybody knows she's been indicted. Like, everybody in her office quit when the FBI. The FBI shows up and gives you a business card and announces, they're the FBI. Everybody quits. So I said, do not. Have. Do not. Don't. Don't come here. Because they already know. They're already concerned. So I go and I meet her and Pete and we sit down at the. At a restaurant, you know, a little pizzeria. And I Sit down. And she starts telling me that the FBI is asking questions about me. And I'm like, what are you talking about? Like, what are they asking? She goes, look, they came in, they took all our files. And, like, I was like, I don't know any of this. I'm like, when did this happen? She's like, yeah, they have. A couple of weeks ago. And they. They. And they have some of your files. Because I had closed several loans for my wife at the time. We were buying rental properties. My wife didn't have a job, so it's all fraud. But I could not close those loans at my mortgage company because I own the property. So I'm selling those properties. I bought properties, renovated them, and sold them to my wife to get around something called seasoning. Seasoning says you have to wait six months to a year to refinance at the market value. Otherwise, you want to refinance, that's fine, but you have to refinance at the price you purchase the property at. But I bought these properties for 80 or 100,000, renovated them, sold them for 2, 300,000 to my. My wife, who got a very. Didn't even get a big mortgage. We were just trying to kind of get around a guideline, so. But my wife was not working, and I provided W2s and pay stubs. So when she says all this, she says, yeah, they're looking at your. The loans you gave me at. At your wife's loans. And I went, oh, my God. I said, well, you didn't tell them that the W2s were fake, did you? You didn't tell them the pay stubs were fake, did you? You didn't tell them that the down payments were. You didn't tell them that we were married, did you? I mean, just absolutely buried myself. And as I'm telling her this, I was like, okay, I. I was like, I. I kind of caught myself, and I. Okay, wait. Wait a minute. Look. Okay, here's what you're going to tell them. You're going to tell them you never met her. She called on the phone. Like, I start trying to devise a plan that will answer their questions without getting my wife in trouble or them in trouble. And if nobody cooperates, the whole thing should shut down. You know, they. It doesn't go anywhere. There's no way. There's nowhere for them to go if everybody just kind of stonewalls them. So as I'm saying all this, Gretchen says, matt, we can't lie to the FBI. And I go, what are you Talking about you're already lying to the FBI. I mean, you, you, you know, you. You've been lying to the FBI. I mean, I just refinanced your house. And before I can really say anything, Pete jumps up, her husband stands up and he says, we've never lied to the FBI. We may not have told them everything, but we've never lied. And I thought, like, what? Who, like, who are you talking to? Like, I know that's not true. So you're not saying that for my benefit. So I was just. I kind of look at them and I'm like, what? And I just, I remember looking down and this may mean nothing, but both of their cell phones were right next to me, right? And I remember they were probably just wearing wires, but I just remember thinking, those cell phones are microphones. They probably weren't. But I remember thinking, oh, wow. And I just, I looked at. And I went, wow. And I said, well, I hope you're going to get something for this. And she immediately starts crying and she says, matt, I'm sorry. I have a kid. I can't go to jail.

Do you have kids at that point?

Yeah, I, like, I have a kid. Like, I have a kid. And I was like, wow. I. Wow.

What have you learned about friendship from that? Like loyalty.

Oh, yeah, there's. No, there's. That's a. That's. It's sweet.

That must have hurt.

It's cute. I mean, I love the idea of it.

You don't think that.

No. I'll tell you why. So I go back to my. I go back to my office. I remember I told her, I said, tell the FBI agent to call me on the phone. Do not come in my office. So I go back. I'm still trying to figure out how to weather this right. I go back, I sit down. Phone rings. My secretary comes in and says, hey, agent. I'll never forget the guy's name, Agent Scott Gale with the FBI. And I was like, okay. Is on the phone and she's standing there. I was like, close the door. Get out and close it. She's like, so get on the phone. He asked me if I'll come down. I said, yeah, absolutely. Let's schedule it for next Tuesday. I put it off four or five days. I go to my brother in law immediately, who's, Who's a lawyer, and he says, oh, yeah, yeah. I don't really tell him exactly what's going on, but I tell him this is what's happening, kind of, and I may be in trouble. A I need a federal defense attorney. I don't even know what a federal defense. I don't even know the difference. But he said, you need a federal defense attorney. It's the FBI. So he, we go on a couple, we meet a couple lawyers. I end up getting a lawyer. I give him like 75 grand. And he started to have me convinced. Initially, he had me convinced I was probably going to go to jail for a few years. But really that's what they kind of do to justify you giving them $75,000.

Right.

And then. But the more I thought about it, you know, and read, he gave me the guidelines that, that supposedly I had. I had, you know, the, the fraud that I had committed and what the. In the guidelines that oversaw that. And I read it and I was like, I'm not really in trouble here because I'm looking at a felony, but I'm not going to go to jail. Because there was no potential for the bank to lend, to lose money. So because I bought the house with like a hard money loan and then I renovated it with my own cash and when I sold it, it appraised at 250,000. My, my ex wife borrowed like 180, so there's plenty of equity. If the whole thing had gone into foreclosure, they still would have got their money back. And to be honest, by the time all this happened, there was only like three of the three properties. It was like five, but we'd already sold a few. And at this point we had just sold another two. There's like one or two properties left. So we're selling at that moment we were selling them. So I was like, no, I kind of argue with them. But then he wanted 75 grand, I gave him 75 grand. And then he comes back and he says, good news, there was no potential fraud. So I can get you three years. Now here's the thing. Here's, here's what I always kind of look back at. When I first got, went into his office, he said, he said, listen, you haven't been indicted yet. I spoke with the FBI, I spoke with the U.S. attorney, they believe and they've been told. And he said, look, they didn't tell me exactly what they have, but they said with the, the evidence that they have on you, based on two confidential informants, that it's, you cannot go to trial. And I was like, right, of course I knew that. And I was like, okay. He said, but he said, you haven't been indicted yet, and they are fairly certain that you're running a mill, right, A fraud mill over there, and that you guys are churning out fraudulent loans. Now, they can't come, and they can't come and raid your office and do anything about it yet, because so far they only have you. But here's what I'm saying is that he said, I can keep you from being indicted. It's called pre trial. It's a pretrial intervention where we go in and what we'll do is you go, you work, you go in, talk to the FBI, you go grab a bunch of your mortgage broker's most egregious files, grab them, bring those files to the FBI. Go work with the FBI. They will indict them, and you will not be indicted. And I said, which I kick myself to this day. I said, absolutely not. I'm not going to snitch on them. I'm not going to cooperate. I'm not going to. You know, I'd seen the Godfather. You're not supposed to cooperate. You're supposed to be loyal. I'm not going to do any of that. And, you know, and so I say all of this where, you know, looking back, like, I would have, if I could go back in time, I would have gone into our weekly meeting with a dolly, and I would have walked in front of everybody and scooped up two or three of the file cabinets and put them in the back of a truck and said, listen, you guys are going to be talking to the FBI soon. I suggest you get attorneys. And I would have driven off, but I didn't. I thought, no, be loyal. You know, don't do that. And what happened was, when the other thing falls apart, right? When the next scam falls apart, every one of these people go to the FBI, like, they're not even coming to them. These guys are going to the FBI with lawyers. I want to cooperate. I want to tell you what Cox did. I want to help. I want to. And I'm think like, I never had to get indicted to begin with.

So you think that most of these people, from your experience, are going to sacrifice all integrity. That's a funny word.

Sacrifice applies to this. But that's right.

They're going to sacrifice friendships and loyalty for just to save their own ass.

Yeah, that. I only had one person that did not talk to the FBI. I had one person that every time the FBI or the Secret Service went to that person's door, she said, don't come to my house again. I don't have anything to say about. About Matt. I have nothing to do with any of this, talk to my lawyer. This happened over and over again. And that's my ex wife, she's a gangster.

So are there people in this world you trusted or you still trust?

I, you know, the problem is eventually I cooperate. And at the time I didn't want to cooperate, I didn't believe in cooperation. But after seeing how many people cooperate and the way the system is set up, I think that my understanding of loyalty is vastly more realistic now. And I think that if you're committing crime, if you're absolutely like the things I did, I did a bunch of scumbag things. You know, I mean, I'm not killing people, but I'm doing scumbag things. I'm lying, cheating, stealing, that I'm a thief. You know, you boil down to it, that's what I am. So you can't go around behaving like a scumbag, dealing with scumbags and then expect those same scumbags to suddenly abide by some kind of a street code and not roll over on you, you know, and it does happen, but it's like in the, it's in the 90 percentile of people that cooperate. 90 something percent. And people cooperate when they're not even looking at any real time. So if you're looking at 30 years and especially after going to prison, you go to prison and it's like this guy's a stand up guy over here. He got 30 years. He could have cooperated against all of his co defendants, but he didn't. Nobody comes to see him. His wife divorced him, you know, his kids ended up in foster care. His, you know, his, his friends are, are, are cleaning out his house. Nobody puts money on his, on his, his books. Nobody comes to see him, nobody answers his phone, Nothing. He took 30 years. Most of those guys turned around, they end up getting indicted for other things. Years later they cooperate. And the best thing this guy's got it going for him is that he can walk around and say, well, he's a stand up guy. That guy's going to the same halfway house as me. He's probably, he's gonna do 30 years where I'm gonna do 10.

Stand up guy. Meaning he never snitched.

Right.

And so everybody's seeing this example and saying, well, I'm going to snitch then. But it sounds like what people are doing is they're signaling virtue, Signaling like there are, they would never snitch and actually do secretly.

I mean, what is it? I, I remember I talked to one of the Cos at the prison one time, and he said, he said, I said, I said, 50 of the guys here snitched. He goes, it's more than that. He said, but Listen, he was. 100% of them are lying about it. He said, so there's nobody here that's going to tell you they, they snitched. Nobody. So there's guys, tons of tons of them, that cooperate. If 80, 90% of defendants cooperate, you know, you start doing the math and you, if you, you ask 10 guys in prison, all of them say, I didn't, I didn't cooperate, I didn't cooperate, I didn't cooperate. Like, okay, you ask 100, I didn't cooperate. Nobody's gonna say I cooperated.

Does that break your heart a little bit that people backstab each other like this?

It does, it does. But, you know, but I have such a low opinion of people, you know what I'm saying? Like, I don't expect, it's not that I, I don't like people is that I just don't expect anything of them. You know, I don't expect you to look out for me. You know, there was a time when I did. I thought, I look out for you, you should look out for me. But I just don't expect that anymore.

See, But I think humanity flourishes because there is a lot of people out there that do the thing that is difficult to do in terms of integrity.

That may be, but these, these aren't people with integrity. These are criminals. If these were decent human beings, and all of them will tell you, well, why'd you do that? Oh, you know, I was a drug addict or I needed the money. Well, if you were a decent human being, you would have gotten off the drugs. You would have gone and gotten three jobs. You can work 80 hours a week. I've done it. You can work 84, 85, 80. You can work 90 hours a week. You can do that. Oh, I did it for my kids. No, you're lazy. You could have worked three jobs for your kids. Instead you decided to sell methamphetamine. Well, I was, I was addicted. You could have gotten off me. It wasn't important. It was the easy way out. You're not someone with integrity. So for you to sit there and say, hey, I'm going to act like a scumbag, but now I got caught or you got caught, and I don't want you to tell on me. Well, you're a guy that robs banks. You stick guns in people's faces. You Kidnap people, you torture people, you sell drugs. You're not, you're not a moral, ethical person, but you want, you want everybody else to hold up to some ethical code while, While you're robbing grandma. That's not right. Like, you know, so, you know, I, I get, I get the whole Omar code, you know, and there was a, there was a time when I was, you know, delusional enough to believe that. But, you know, after you go. After you're going through it. No. And after going through it multiple times. No.

I have to really think about that. And I deeply appreciate your honesty on this. I, I think, I mean, there's all kinds of criminals in this world, and they all have criminal, all kinds of stories. And your story is one of, I don't know if it came from desperation versus a love of this kind of game.

Right?

Like, wasn't part of it an attraction to the, the creative aspect of this, of breaking the rules when nobody else can and you figure out a way to do it?

I think, I think initially it was I needed the money. Like, that's the first thing, you know, you say, oh, okay, well, I need. And if you ask most guys, oh, well, man, I needed the money. You need the money, but. And then I definitely needed the money. But then you get $50,000 in your bank, and then you get 100, and then it's 200, and then it's half a million, and then it's a million. And what the hell are you still committing fraud for? You've got half a million or a million dollars in the bank or worth of real estate, or you're making five, $10,000 a month just in rental income. Why are you still committing fraud? So it turned, I think it morphs into the creativity in part for me. And two, it was a chance for me to prove to everybody how smart I was. You know, I mean, it was done out of desperation initially, and then it just turned into pure narcissistic arrogance. Look at me. Look at how I can do things that nobody else can do. Look how smart I am. I just walked into bank of America, handed them seven documents that were all fraudulent, and they cut me a check for $250,000. Like, wow, I'm amazing, you know, and guess what? They're never going to get their check. And they, they won't know even know where to start to try and find the person because they're looking for a phantom. So, you know, and you feel great. I felt great. I used to. I felt like. I felt like James Bond. I felt like 007. It was amazing. And you know, and it did. It. It feeded my need to feel important, you know, even if was. It was. Even if that was a lie, because all that success was just a lie.

Well, no, you're good at it.

It was good at it, but it was. It's not. It was illegal, like Elon Musk, you know, I'm saying, like, there's. It's not like you're an. I'm an exceptional human. I'm an exceptional human being at a horrific thing, at committing fraud.

Well, the question is how many people are getting hurt?

Because initially, the thing is, initially, nobody got hurt. That's the thing. Nobody ever lost any money directly. Like, I didn't go and say, give me $50,000 and I ran off with your money. Like, I wasn't doing that. And that was a great justification. But at some point, and we'll get into that, you know, I take off on the run and people do lose money. I didn't take that money directly. And for some reason, in my, you know, sick mind or whatever the case may be, that seems like a distinction to me that makes me feel, okay, is that I never said, give me 300, give me $10,000, and I ran off with it. But I put people in a position where I damaged the credit or damaged the title to their house, and they had to go get a lawyer to fix that, you know, and so that they had to go pay a lawyer $10,000. So I absolutely caused that person to me, you're a victim, and I owe you that money. And it was a shitty thing to do because even at the time I was like, oh, they'll make a couple phone calls. It'll be fine. It wasn't fine. And if I had really put any thought into it at all, I would have known it's going to really affect these people. And those people had done nothing wrong with the exception of trusting me. They rented me their house or they owner finance their house. They made the mistake of bumping into me, and now they owe $10,000, $20,000, you know, and I'm sure a ton of anguish.

So what happened when you were caught that first time?

So I was caught. I got three years probation. You know, I took the probation.

Does that involve.

Initially it was. It was such a slap on the hand on the wrist.

Were you allowed to still practice?

Okay, so I wasn't. I had to. I couldn't own the mortgage company anymore. That was a good question. Because, like, you would think you know, wouldn't it be great if I could keep on going? But what they said was, you know, you, you have to forfeit your, your brokerage, your broker's license and your brokerage business license. And what I did was I, I transferred my brokerage business license to a guy that essentially bought my business. They allowed me to work as a consultant in the mortgage industry, you know, because they went, you know, they go, my lawyer goes to the judge and says, what else can he do? So, and so I have a friend, his name's Dave Walker, he was a cpa. He came in and he bought my business and he paid me like $9,000 a month and that covered my bills. My wife and I got divorced, so she's my ex wife and I, I don't know what to do, right. Like, I don't, I'm, I could, you know, and I always say, you know, I could have like, you know, you look back and it's like I could have claimed bankruptcy. I could have moved into my parents spare room, you know, something like that. But you know, because I had, I had, I lost everything in my divorce. I had huge child support payment, you know, not that that has anything to do like with my, my ex wife. Like I absolutely signed up for that. Like I wanted to pay that, but it was, it was, it was a chunk of change, you know. So we're talking about a couple thousand dollars a month for, you know, for child support. She got all of the apartments that we have. We had about a million, million and a half dollars worth of apartments, which isn't a lot now, but that's probably five or six million dollars now. So she got all the apartments, so she got everything. So now I'm sitting here like, I got no, I can't be a mortgage broker. I can get my $9,000, but I have to help this guy run this company, train people, do that sort of thing. So what I decided to do was I was going to start flipping houses legitimately or not? Well, initially I thought about doing it legitimately, right. But at the same time I was also in the middle of figuring out how to make these synthetic identities. So I'm making the payments every month, remember, two months, in three months. No, no credit scores, no credit scores, no credit scores. And I'm also saying I'm going to go, I'm going to start buying houses, renovate them, sell them. So to the, the truth is we actually renovated probably one house completely. I remember it was on 26th Street. We renovated the house completely on the.

Outside in and the inside.

Yeah, outside, inside. It's done. It's good.

Okay, great.

Me and. Me and this guy, actually. Dave. Dave Walker, the guy that bought my business. So we renovate it. And it just so happens at the same time I go to pulled credit one day and wow, 700 plus credit scores. And I went, we don't have to sell this thing at all. Like, we just, we can just. I can sell it and put it in this guy's name and let him refinance it. And so that's what we did. We ended up. I ended up selling it to this synthetic identity.

Do you remember the first synthetic identity? The name.

The first one was a Joel Colon.

Yeah.

And then I started getting creative because the ones after that I started naming. So I had like Joel Colon and an Alan Duncan. But then I. Do you remember the movie Reservoir Dogs? So I started naming the characters after guys in the Reservoir Dog. So I had a James Red. You know, I had a, like a Michael White, Lee Black. I had a William Blue, David Silver, Brandon Green. So then I start developing these guys. Now I thought, oh, forget those, those normal things. I'm going with these, with the Reservoir Dogs. And I thought it was so cute too.

You think in retrospect, it was stupid.

That was just.

It's.

There's so many things, so many mistakes I made. I mean, within the fraud, there are mistakes I made, but, you know, other than just the overall committing fraud. But it was just like, I thought it was so cute. And then, you know, you get in front of the judge, and the judge is hearing about the reservoir dogs and Mr. Mr. Green, Mr. Black, Mr. White, Mr. This Mr. And he's looking at me just like, you jackass. Like. And, you know, what am I saying? I'm like, yeah, I thought that was cute, you know, but nothing's cute. So, you know, plus, I'm making fake banks.

What's the purpose of the fake banks?

Well, sometimes you have to have your down payment in the bank, right? So you have to. They want three months worth of bank statements to see that, hey, he's got his $50,000 in the bank. And then the more, the more properties you buy, they want. Start to want to see what's called reserves. They want to make sure that you can pay all your mortgage payments. If this guy loses his job, can this guy maintain all these mortgage payments for the next six months? And see, they do that and they think you're going to go, you know, oh, no, he can't do it. They go, well, Then we won't lend it. Well, when they do that to me, I go, of course I do. Of course. He's got it. Let me send you over the bank. Bank statements. Oh, you want to call the bank? Call them.

So there's a phone number. There's a website.

Yes, you can call. We'll get on there. I'll. I'll do the whole, you know, and hold on. Okay, what's the name again? Do you have the account number? Hold on. You wait a little bit. You know, you come out. Oh, okay, I got it here. I can't tell you the exact amount right now, but what is the. What was his balance last month and. Oh, yep, that's it exactly. Okay, thank you. Click.

Would you do different voices or would you be.

No, I've done different voices or I just have somebody else do it. You know, Gretchen would have done it or. Or one of the brokers. Susan would have done one of the brokers that worked for me or, you know, Kelly or Johnny Moon. I have so many guys and, you know, they just get on the phone and they do it because they're all doing something fraud and we're all working together. So. Hey, I need you to call this guy. I need to call this guy and verify this. I'm at the bank. Okay. I'm at the bank. Okay, cool. And they call back and.

Does this feel like an organized system or was it more improv? Just like dealing with the different situations?

The government would definitely say it was organized. I always say it was. You know, you're a bunch of. You just a bunch of guys, you know, to, you know, it's. You're joking around with everybody and you're. You're helping each other, and it's not like everybody's, you know, kicking up the tommy.

Yeah.

You know, so.

So. And then all these new puzzles come up, and you figure out ways to write.

You go in and you say, hey, I've got. I've got this loan. I need to get this loan at. This guy's trying to buy this house, and I need a loan that looks like this. Where can we go? And by the way, they cannot. They cannot order a copy of his tax returns. So you don't want to have to sign what's called a 4506. So they're like, oh, okay, listen. So and so's got a program that, you know, and you go back and forth, but you have to have this much in reserves. But you got the bank, right? Yeah, yeah, I got the bank. I Could do that, you know, so you, you go in and you throw it out there to five or six guys and you're going to come up with an answer.

So you're on probation here just to self reflect. Did you start doing this while on probation because of the money or because it gave you meaning?

God, you know, I mean, part, a big part of that. The reason is I did not want to move back in with my parents. And I didn't want my father to see me struggling, and I didn't want him to. It was my success. He had no idea my success had been the first time he'd ever really been proud of me.

Does that mean financial success?

Yes.

At which point, what was the first time you told him you did something? He was like, you could sense him being proud.

Oh, when I became a mortgage broker, when I, when I became a mortgage broker and I went to work for the company, and we're talking about within a week, I got a client, three days later, I got a client, a week later, got a client, two days later, got a client. Like, I closed four loans my first month. And my dad was like, well, how much money are you going to make? And I'm like, oh, I'm charging this much. This. I got a point on the back. I got this. I got, boom. I'm thinking I'm gonna walk home after taxes like 10, 11,000. Jesus God Almighty, you know. Are you serious? Well, we'll see. Don't start counting your chickens before that, you know, and, and then, you know, two, whatever, three weeks later, four weeks later, you know, boom, I got a check. It's like $9,000 or something, or. And then, you know, the next month it's 12, and the next month it's 16. And, you know, then they make me a manager. And, you know, it just.

He didn't know any of it was illegitimate?

No, he thinks, he thinks my son, he's brilliant, you know, he's great. He's wonderful. I had, you know, was certainly not proud of me prior to that. But, you know, my dad was athletic, he was extremely bright. I mean, brilliant. And I was a kid who had to be put into special schools, who barely graduated high school, who ended up going to college and getting a degree in fine arts because I was never going to be able to get a degree in business. It wasn't going to happen. So when I graduated college, I remember with the, the degree in fine arts, he said, the best you'll. The best thing you could do with that is maybe you could draw caricatures at Disney World, you know what I'm saying? Which wasn't a compliment by any. It wasn't like, hey, you could draw. So, yeah, he, you know, and then I turned around and I tried to go to work for State Farm Insurance, which is who he worked for. He worked for them for like 40 something years. And I failed the aptitude test. So then I went and worked for another insurance company and I was an insurance adjuster, but I couldn't keep up with the workload. Then I end up working construction. I'm still barely paying my bills. You know, that's basically where my dad felt like. That's, that's, you know, he was polite to me. You know, we were, we were, you know, cordial. But yeah, I wasn't. I think he felt he deserved a better kid.

So. Well, when you, when you started doing mortgages, that's when he was like, horse.

He was like, this kid's got something. I'm driving, I'm driving a new.

I got to.

Just pulled in in a new car and I got to. I just bought a house that was, you know, four or five blocks away from his house, from where I grew up for where he lives, you know, lived at that time, you know, six blocks away from where my sister's married to her lawyer husband. Like, I'm doing pretty good. And then within three months, we bought, you know, where my new wife. We buy a, a quadplex, and then we're buying a triplex and another quadplex and a 10 unit and a duplex and another duplex and a quad. And it's like, what the hell's going on? This guy is blowing up. He's going on vacation here and vacation here. And, you know, so he, you know, and so when, when, when the FBI comes in and they indict me and I take the three years probation, like, I mean, the. Probably the worst thing in the world, you know, other than going to prison, would have been just having to just sell everything and go move in and start over and sell used cars. Not that there's anything wrong with selling used cars, but I just felt like, you know, I just didn't want to disappoint him any more than I already had. So I thought, I'm going to flip houses and then I'll start maybe a development company, so I'll buy some vacant lots and all this and that. The problem is these houses I'm buying for 50,000. If I fix them up and sell them, maybe I make 20, 25,000. And then you got to find a qualified borrower. It's very hard to find a qualified borrower that wants to live in Ybor City. Back then, I still think it's rough, but those same houses are going for three and 400,000. So, you know, I'm buying houses. I got to. I got to get qualified borrowers. I do all the renovations. It's. It's a nightmare, you know, and if I, you know, looking back, it's like, okay, well, then you got to bite the bullet. It's just what you have to do. I didn't want to do that. I didn't want to do it. Whether it was laziness or. I don't know, you know, I just thought, I'm good at this. I'm going to run. I'm just going to start running a scam. I'm going to figure out how to drive the prices up, buy the houses for 50, record them at 200,000, and then have these synthetic identities. Buy all the properties, refinance them, pull out the cash, make six months worth of payments, let them all go into foreclosure. And that really, really started working well. Very well. I had one time where I had a guy. It was James Red. The synthetic guy did. He was James Red, and he had bought two or three houses. And there was somebody at the office who was friends of somebody who knew the title company where we were closing the loans. And he called that her. Her name was Mary. And said, mary, this guy James read like Cox is doing something shady. James Red doesn't even exist. She goes and looks at the file, her last couple files, and she realizes, of course, obviously, like, this guy never showed up. She remembers Cox picked up the files, like, and he's saying he doesn't exist. So she freaks out. She calls the mortgage broker. Mortgage broker calls me. Mortgage broker calls me up and says, listen, Mary said she's not closing the next loan unless James Redd shows up. And I went, wow, that's a tough one. And she's like, okay, so what do you want to do? Do you want to go to another title company? Like, we're supposed to close in, like three days. Two. Three days? I said, well, I mean, he's gonna have to show up then. I said, I'll figure it out. Like, give me a couple days. Let me figure this out. And she's like, okay, well, I don't know how that's gonna happen. He doesn't exist. Keep in mind, at this point, I don't need IDs, I don't need a real ID. I mean, I can. I figured out how to kind of make a real id, Right? Like, I could make one. I could take sandpaper and sand off the information on a regular ID and then I would print the. The corrected information in reverse on a piece of transparency, and I would glue it over there, and you could still see the holograms and stuff. It actually worked pretty good. I don't. A cop's not going to. It's not going to pass muster with a cop, but somebody at the bank, like, I was able to go in and I would open a bank account with it. Well, so one of the things I had done when I was closing these loans was I would go online and I would pick. You have to pick a photo of somebody, right, to put on the. On the driver's license. Right. So I'm not making a fake ID for all these guys, because I don't need a fake ID for all these guys, not with my picture on it. But I need a fake. I need. I need a copy of an id, But I need a picture. Where do I get the picture? So I go to Hillsborough County's arrest website, and I would find people that I knew that had been arrested. And so I found a guy named Eric Tamargo who had been arrested. He had, like. I don't know what it was, the DUI or domestic violence. I forget what it was, but there was a picture of him. So I print out the picture, I cut it up, I paste it onto a driver's license, and I make a copy of it, you know, for. For James Red. That's what I'd been giving the title People. When I would close, I'd sign all the documents and I'd leave them that copy so that it looked like they made a copy for. Of the. Of it. And then they would notarize all the documents, even though they'd never seen this person. They have a copy of his driver's license. Everything's signed. Cox that he signed it. It's good notarized. Here's your check. So what I do is I think, let me see if I can get Eric to do this. He's been to. I knew he'd been in prison before. So I call up Eric, and I remember one of my buddies like, he's never gonna do this. And I was like, I think he will. I think he will. So that's how. And that's really. That kind of like, you think. What do you think? Let me try. Let me call him. I don't know. Bro, like, that's the kind of conversations you're having. Like it. But really looking back, I would love to hear the.

The opener few sentences that you have with him.

I got. I can tell you exactly what I said, because it's burned in my mind. He comes in. So what Eric was doing at that time, he was actually working for us. He worked for somebody else. But periodically, we would. You know, we'd buy a house, and we'd call him up. We'd say, hey, can you. You and your boss, can you guys come over and trim the trees of this house? Trim all the trees, take all the crap in the yard, clean it up? They go, yeah, sure, no problem. Because that's what he did. Worked for, like, a handyman service. So they would come and they'd clean it up, and they'd do that. So I said, can you come over? And he was like, yeah. So he comes to the office, whatever, a few hours later, and he comes in the conference room. I said, hey, Eric, what's going on? And he says. He says, hey, you know, how's it going? I said, yeah. I said, listen. I said, I. I'm gonna tell you something. I need a favor. He's like, okay, cool. He's like, what is it? I said, you know all these houses we've been having, you go and clean up? He's like, yeah, we had that. You had. You painted that one house? You did this? Yeah, yeah, I know. I know, right? So here's what we've been doing. I've been buying these houses for $50,000, recording for 200, and then I have these fake people buy them, and I explain. I just lay it out for him, and he's like, wow, that's. He's like, that's fucking, bro. That's ingenious, man. That's. That's smart. Like, you know. I was like, okay. So. Yeah, I know. That's great. So here's the thing. I said, the title company, who's been closing some of these loans, and we have a closing in a couple of days, she wants this guy, James Read, to show up, and I need someone to show up as James Red. And he goes, wow. He goes, who are you going to get to do that? And I was just thinking, just like, you're not understanding. I'm not confiding in you because I need a friend, you know, so. And I looked at. I said, well, I was thinking you might do it. He was like, because that's a big favor. I said, it is a big favor. I Could be in a lot of trouble. And I said, I know. And he goes, well, wait a minute, because I can't go. He said, you have to give these people a driver's license. You said, the driver's license is. You were, you were using mug shots. She, you said, she's closed a couple of these. She already, she's seen this guy's picture. And I go, she has seen his picture. I said, the thing is, for James Red, I pulled the mug shot offline of you when you were arrested a couple years ago. And he jumps up and he goes, joe motherfucker. And I go, whoa. I said, eric. I said, wait a minute. I said, hold on, hold on. I said, listen. I said, I only did that because I knew if it came down to this moment, you were the only person that I knew that could pull this off, that have the balls to walk in and do it. And he sat there, he went, yeah, you're right. You're right. And I mean, I, I, bro, I, I, I couldn't believe he fell. Listen, this guy would beat the brakes off me. He was, he's like 5:10, 5:11. He's boxed. He's a big guy.

Yeah.

So, you know, it's like, I've weathered that part of the storm. And he sat there, he goes, right, right? And he goes, well, I'm not doing it for free. I'm not doing it for nothing. I said, no, bro, of course not. I mean, what, you know what? He's like, you're making a lot of money. I said, well, keep in mind, a lot of that money goes back in the prop property. It's not like we're walking away with, you know, I think I said, like, tens of thousands. We're really walking away with hundreds of thousands. This is not like we're walking away with a bunch of money or, you know, it's, you know, we got to put it. But we gotta buy more properties where I keep it going. We gotta make the payments. No, I know, but still, I could get in a lot of trouble. I said, I understand, bro. I go, well, what do you want? And I remember thinking, if he asked for more than like, 10 or 15,000, like, I'll just, I'll do it myself. We'll just change title companies and we'll go, and I'll, I'll do it myself. And he sat there and he went, I want $500. And I went, $500? Listen, I almost started laughing. I mean, I was like, I put my hand over my, I was like, $500?

Yeah.

It's going to take you 30 minutes. And he's like. He's like, I don't care, bro. I get in a lot of trouble. I was like, oh, well, I'm not paying you now. You got to sign first. And he's like, oh, you know, I'll sign. I'll sign. I know you're good for it. I hate it. For 500 bucks, I made a fake ID form. He goes in to the place, he signs. James Red comes out. What was even funny. What was funny about that was when we walked into the title company. We're sitting in the. In the lobby, and Mary comes walking out. She looks at me, she goes, Ms. Crocs, I don't know why you're here. She goes, I told Kelly, that was the broker.

She was.

I told the broker that I'm not closing the loan unless. Unless James Red shows up. And Eric stands up on cue, and he goes, I'm James Red. And she was like. And she goes, hold on a second. She runs in the back, comes back with a file, opens it up, looks at the picture, and she's like, oh, I'm. I'm so sorry. Give me five minutes. I'll. I'll. I've got the file. Prints up the docs. He goes in, signs, and when we're there, she's passing out the checks. 5,000 here, 25,000 here. 35,000 here, 7,000 here, 6,000 here. So he sees all these checks, and I'm like, oh, I got that. And the construction company. No, no, no, I have that. I'll take care of that. I'll take care of that. So I get all the checks and I leave. We go sit in my Audi, and he sits down. He's like, bro, there's a lot of money. A lot of that money goes back into the properties.

Eric.

And he's like, I still, bro. And I said, and I counted out 500 bucks. But listen, a week later, we had another closing. So I. He comes in. I said, hey, bro. He's, hey, what's going on? And I said, I need you to do the. The James Red thing. He goes, yeah, I've been thinking about that. I did that. Way too cheap. I said, I get it, man. Well, how much do you want? What do you want? And I'm thinking, if it's. If it's more than 10 or 15, I'll do it myself. And he sits there and he goes, I want a thousand dollars. I go, a thousand dollars? Oh, my God. So I gave him A thousand dollars. And he did another one. And. But by that point, it was like five or six. We'd done five or six with that guy. And after five or six, plus the credit cards, plus, you know, all the other things, like, their credit scores start dropping. You know, if it was 700, now it's down to, like, 600. And at 600, you couldn't really borrow enough to make it worth it. It's like. And I have other people in the wings waiting. So, you know, we would just. I'd go out and I. I run up the credit cards and. And pull them as much money, Pull all the money out of the. Out of the banks and close the accounts and then stop paying.

And you said a lot of people knew, so he was one of the.

People and that he was one of the people.

Why do you think nobody said anything?

I. Well, I mean, I think everybody was making money. The appraiser. At that time, I had an appraiser. Eventually, I order the appraisal software, and I just start doing the appraisals myself. Like, why give this guy 500 bucks? So.

So you were doing the appraisal yourself.

Bro, I'm doing it.

How's that possible? How's that? Is there a check against it? Is there?

There is. That's funny. Nobody ever questions that. You actually have to have a license to get the appraisal software. So I get an appraisers that we're working with, I get her license, and I create an email address as her.

So it was a synthetic appraiser, Right.

It was a real person. But I end up ordering the appraisal software by emailing. It was called Alamo. Alamo Appraisal Software. So I end up emailing them as her, and they go, well, we can't give you. We can't sell you the software unless we need a copy of your license. Boom. Here's your license. So I send them the license, and then we paid for it with a credit card. You know, you could go get, like, a green dot card. You go, put 500 bucks on it or a thousand. The software was like 1500 bucks or something. So you pick him, like, back then, you know, a long time ago. So 1500 bucks. They mail it to us. And now I've got the software, so now I can, you know, I can do the appraisals myself.

What stops you from appraising it? Not for 200,000, but even more.

There's no comparable sales. So no matter what you sent to the bank, they're going to look at it like they're going to have their in house appraiser is going to do a desktop review. He's going to go online, he's going to check to make sure all the appraise, all of the comparable sales are sold for what you said they sold for are the same square footage were built, what the pictures look like, where, how far they are. He's going to double check everything. But you know, he's some guy who's on salary and he does, you know, whatever 40 or 50 of these a day or something, it doesn't take them long. And so it's cheaper that way where we pay for the appraiser, appraisals, the whole thing. Got it.

So everybody's getting paid, right?

And so at this point I'm doing that right, you know, and I'm getting caught periodically.

Can you give an example? What do you mean getting caught?

I'm living in Tampa Heights, which is right next to Ybor City in Tampa. Right. So this is all, these are all like little suburbs of Tampa and they're all built back in the 1920s, right? 1890s, 1910s, 1920. So I'm, I've, I bought this eight unit building, I renovated it into a triplex. I mean I'm driving an Audi. I'm dating a, a woman that I should not have been dating. Like, I mean, I don't know what she was thinking. So I'm, you know, I'm going on vacations. Like everything, life's good. So. But every once in a while, you know, like we're, you know, where things happen, you get a phone call, hey, this is what just happened. And I, one time I got a phone call from same broker, Kelly. Kelly called me up and said, listen, we got a problem. This was, I want to say this was Alan Duncan. This was one of the first ones that I had done right? We, we used him. But, and so he, so she calls me up and says, listen, Alan Duncan never made his first mortgage payment. And I had a friend of mine or one of my co defendants, when we closed on that loan, we both got checks for whatever, 40 or 50 grand. Keep in mind, we're also buying. Some of this money's going into a business account. We're buying property, we're buying. So it's not like I'm pocketing hundreds of thousands of dollars or even, you know, even 20 or $30,000 on every closing. I'm more like I'm getting 25, 10, 20 and this guy's getting 10. This guy's getting 15, and then we're taking 60, and we're putting it into the business account. We're buying a bunch of vacant lots or we're building some new houses. We're trying to kind of take all this and turn it into a development company, but we still have to pay our bills. So, you know, my buddy's got to go to. He's got to go to Amsterdam at least for two weeks, you know?

Right.

He's from Belgium. That's. You apparently have to do that at least once a year. So he. He was. So when I gave him his chat, the check, I said, look, you're gonna make the. Here's like 20 grand or 15 grand, but you got to make the payments on this thing for the next six months. He goes, no problem. I said, okay. So she calls me up a month and a half later and says, hey, Alan, Duncan did not. Did not make his first payment. And I went, oh, my God. And I. And he was actually renting the apartment downstairs for me. So I run downstairs, and I open the door, and I go, bro. I'm like, did you make Duncan's payment? And he turns around. He's like, is it due? And I was like, oh, my God. So I run back. You know, I grabbed the phone. I'm like, he didn't make it. He didn't make it. She's like, okay, well, here's what's happening. The account executive is calling. They've got the file, and it was called. It was South Star Bank. South Star bank has it. They reviewed it. They've already been ordering documents. They. They. They're saying that this guy there said there's a problem. They are. It's. It's falling apart. Like, the whole thing's falling. They know something's wrong, but they don't know exactly what.

This is just something suspicious that.

She didn't tell me that on the phone.

Okay?

Like, she. She's saying there's something wrong. They're freaking out. Yeah. Because the account executive didn't really know. She just got a phone call saying, hey, have you ever met this. This broker? Did she meet the guy? Who is the guy? He hasn't paid. We're calling the cell. Nobody's answering. And really, most of this was. Was my buddy Rudy's fault. He just not doing any of this stuff, any of the things he's supposed to be doing. So we go to the office, and I call South Star Bank. I get the secretary, and I said, look, I need to talk to whatever the Guy. The big guy was. It was. One of them was like the president, and one was like the somebody else. Anyway, Vice president. So I said, I need to talk to so and so the vice president. And she says, I'm sorry, he's in a business meeting. I said, well, listen, tell him this is Alan Duncan. Like, you need to go tell him is Alan Duncan's on the phone right now. I assure you, he wants to talk to me. And she's like, all right, hold on. And I mean, like 20 seconds later, you know, speakerphone. Hey, Mr. Mr. Duncan, this is so and so. And you know, I'm here with the. With our lawyer and the president of the bank and our head of fraud. We were just discussing you, and I was like, okay, I understand that you guys are. I haven't made my first payment. I said, it actually came back in the mail. I had the wrong address. That was completely my fault, and I apologize. I said, but I can get your cashier's check today. I will overnight it, no problem. Hope that's going to be okay. SJ said, way. We're way past that. Way past that. I said, okay, what's. What's the issue? And they were like, I mean, look, to be honest, I. I don't think I'm talking to Alan Duncan. I don't think there is an Alan Duncan. He's like, I mean, your Social Security number was issued a couple years ago. The. We called the bank and. And this was. I. We had gone with, like, south or Sun Trust bank, right? So it was a real bank. So it wasn't our normal bank. And they called. They don't. They don't have any record of you. And I was like, well, I've never been happy with South Star bank there. If, you know, it sounds like a banking error. And they're. And they're like, yeah, I don't think this isn't cute.

He says, I don't think I'm talking to Alan Duncan right now.

Right.

And you were terrified.

Just terrified.

But you have to be playing it cool, I guess.

I mean, I know. What am I gonna say? No, you're talking to Matt Cox. Like, I can't say that. Like, I'm just gotta keep running with it. Just like, okay, well, look, you know, and he's like, you know, we called the dmv this. You know, they don't have a list view in the. In the. You know, in their website. We think that the. You know, we don't think you exist. Yeah, you know, we're still waiting For a phone call back from who? So. So and so and so and so. And I'm just like, oh, my God. And I said, have you called. Have you called the authorities yet? And they were like, no, we haven't, but once we put our file together, we will. And then the head of the fraud department, they said, oh, by the way, Mr. I forget his name, but the head of the fraud department worked for the FBI for like 10 years or something, or 12 years. And I. And I. So, I mean, I'm just like. And by the way, the appraisal. The broker is there, and my buddy Rudy is there. And I mean, there. He's pacing the room. She's in tears, crying, like, there. And I'm like, okay, well, fellas, I said, where's this headed? Where's this going? What are we doing? And they. So they're. They're kind of chuckling and joking about it. And I remember being, like, thinking, what's the deal? Like, it's weird. And I said, look, why don't I just. Let me just pay you back. They said, well, we'll get the money. We're not worried about. I said, you don't seem worried about the money, about getting any of the money back. Like, don't. Why don't you just let me. I'll cut you a check. I can get you the money back. Like, what do I. I owed him like, 150 or something. I forget exactly. There was nothing like 150,000. Let me cash a check for 150,000. And they were like, no, no, you know, that's. We'll get the money back when we foreclosed on the property. And that's when I was like, oh, they think the property is worth, like, $195,000 or something. And I went, oh. I said, I understand. Okay, so do you have the appraisal in front of you? And they were like, yeah. And I said, open it up. I said, take a look at comp number one. That's owned by a guy named, you know, Lee Black. Comp number two, you know, is owned by, you know, whatever. David Silver, whatever the names were. And I'm like, you know, like, black, silver, red. I said, I am all those people. And I said, let me tell you what I've done. And I tell him, just laid out, boom, boom, boom, boom, boom. I said, so you can call the FBI, but you're not going to get all your money back. Or you can let me give you your money back and we can let this. We let sleeping Dogs lie. The whole thing goes away. I apologize. You know, I had every intention of making all the payments. It's a glitch. You caught me. No, my bad. And so these guys are just like, oh my God, like now they're, they put me on hold. They're looking through the file. They come back and I remember at some point we go back forth, back forth, and finally they come back and they said, listen, you still have the money? I said, yeah, well, first they come back, they threaten me. Oh, well, when the f. We give us to the FBI, you. I said, that's not true. I said the money was deposited into a bank account. It has since been moved. The bank account. Bank account has been closed. It's been removed in cash. That money is gone. You will never see that money. I will be cutting you. If I pay you back at all, it'll be from another account. And so the FBI agent ends up saying, he's right. Even if we caught him red handed, the likelihood that any of these funds will be ever be recouped is zero. Like, there's almost no money's ever recouped. And so we end up. They put me on hold again. They come back and they go, how quickly can you get us a cashier's check? And I go, like that day, I go get them a cashier's check overnight, the cashier's check. They never called the FBI. They never did anything. Now at that point, we actually ditched that whole, that James or Alan Duncan. I remember at that point we went to the mall, ran up all the credit cards and just threw everything away and walked away because it was shot. You know, that whole, that guy was shot. I think we borrowed whatever $800,000 or 900,000 in his name.

With the banks, it's really, really all.

About the money that, listen, when I go on the run, I got one where I was caught so red handed, it's. It's insane how, how bad it was. And listen, that's not, that's nothing. I got caught by Washington Mutual one time. I was caught by Washington Mutual where we had done six owner occupied duplexes. So if you say you're going to live in a house, you can get about 95% financing. But if it's an investment property, you got to put down 20%, you get about 80% financing. So a buddy of mine who was a sheriff's deputy, we had his wife buy, I'm going to say six owner occupied duplexes, saying she lived in every single one of them. Well, you can't own or occupy six dwellings. Like, that's fraud. Now, granted, her W2s and pay stubs were correct, but she didn't put the down payments down. Even the down payments we didn't put down. We actually got cash back. But months later, they called a lawyer from Washington Mutual, ends up calling the mortgage broker and saying that they ended up with two of the owner occupied duplexes because Washington Mutual had a credit line extended to one of the lenders who'd lent the money. So it actually was Washington Mutual. So it was a couple months later when they went to sell. Sell it in a. You know, they package them together and sell them. They realize we have the same customer with two duplexes side by side, both owner occupied. This is fraud. So she comes in, she tells me, oh, my gosh, this lawyer's on the phone. This is what happened. I'm like, oh, wow, this is horrible. I end up getting on the phone with him. We have a huge. We have a conversation. And I'm like, you know, he's like, look, you know, this is a big deal. We could call the FBI. I'm like, look, who knows who was involved in this. Maybe somebody on your side was involved. Maybe somebody on my side. I don't know what my mortgage broker did. I'll deal with her on my own. Why don't you just let us refinance the properties? Not only did we talk him into allowing us to refinance the properties, he gave us a reduced balance of what we owed him because we couldn't borrow enough to pay him off. So they took like a $20,000 hit just to refinance those properties. Never called the FBI, never did any. It was absolutely fraud. I had a broker one time, we got caught with over a million dollars in loans that he had done that were fraudulent. Pinnacle Bancorp, which was out of Chicago, the owner called me and he was like, look, your mortgage broker did this. Like, there was a bunch of canceled checks. They were fake canceled checks. So they looked like they had run through the bank for the somebody's rent, but they hadn't. Does that make sense? Like, you pay your rent, they deposit it, it goes to the bank, and they've got all the numbers and everything. Well, I had a bunch that were blank that all you had to do was fill out your. Your borrower's information, and then you cut and pasted his full. His name and his address at the upper left hand corner. You make a copy of it. It looks like canceled checks. We had 24 of them. Well, my. One of my brokers was using them for all of his files. Like, even if the person really had a rental history, he didn't want to order it. He just did this. It was easier.

It's faster.

Yeah, yeah. Just.

Wow.

So they catch a million dollars worth of loans. They call me up, and then they caught another million dollars, but they had already sold them to Household Bank. So while I'm on the phone with the. The owner, his name's Gary, and we're talking, he's like, look, this is what we found. This is this. This is what happened. And I remember, I said, gary, at the end of this conversation, if you think I'm cutting you a chef for a million dollars, I said, I just don't have it. They don't have it. This is when I own the mortgage company. And he says, no, I. What. I'm. I'm asking you for your word that if any of these come back on us, they're in Florida, they're in your area. You'll help us get rid of the properties. You'll. We'll foreclose. We're gonna have to resell them. I don't want to be flying down there. Just help us get rid of them. I said, absolutely, of course. No problem. I said, what about the other. I said, well, what are you going to do with them? He goes, well, they're going to be a part of a package, like a $3 million package we're selling to Household Bank. The other ones they had caught had already been sold. The ethical thing to do is to contact Household Banks, say, we will buy those back. We are going to take care of. It's not what happened. In fact, Gary flew down a couple of weeks later, took me and several of the brokers. Not that broker, but several of the brokers out to dinner, had a few drinks, and he openly admitted. He's like, look, I don't care if all the loans have fraud in them as long as they don't come back on me. That's what I'm concerned about, because there's a clawback clause for one year. He's like, so if they can perform for one year, I don't care. That was it.

How many people in the industry do you think are operating like this? And by like this, I mean in the aforementioned gray area.

I would say there's probably after. Like the. Like after the 2008 financial crisis, I would say it cleaned up considerably. But I would say at this point, it's. It's Just as bad as it ever was. And, and keep in mind these, A lot of the loans that caused the problems were like, you know, they called them liar loans or, or, you know, you know, no, no qualification. No qual loans. Right. No income. Well, those loans are, they exist again, like there are subprime back on me. That's what I'm concerned about because there's a clawback clause for one year. He's like, so if they can perform for one year, I don't care. That was it.

How many people in the industry do you think are operating like this? And by like this, I mean in the aforementioned gray area.

I would say there's probably after, like the, like after the 2008 financial crisis, I would say it cleaned up considerably. Companies that are doing that again, they know. I don't think I call them subprime anymore. They call them. But I would say at this point it's, it's just as bad as it ever was. And keep in mind these, a lot of the loan. They got some other name. Yeah.

Branded.

Yeah, they rebranded a little bit, but it's, it's happening all over again.

It just seems the whole, the whole real estate slash banking system is very prone to, to this kind of corruption.

I mean, loans that caused the problems were like, you know, they called them liar loans or you know, you know, no qualification. But how can you fix it? Like if a lot of the things they fixed, a lot of the manipulation they fixed, but if you tighten it too much, then the average person can't get a loan like you. So you, you know, and, and the thing is some of these loans sometimes changing a W2, you know, should that person have gotten in that, into that house? No, he shouldn't have. He didn't qualify. No qual loans. Right. No income. Well, those loans. But he makes all of his payments. So it's like, is it a fraudulent loan? Yeah, but it performs or they exist again. Like there are subprime companies that are doing that again. I don't think they call them subprime anymore. They call them. So they got some other name.

Yeah. Rebranded.

Yeah, they've rebranded a little bit, but it's, it's happening all over again.

It just seems the whole, the whole real estate slash banking system is very prone to this kind of corruption.

I mean, so, you know, I think that. I would say that I forget what the FBI statistic was. It was like 20% or 30% prior to the two. But, but how, how can you fix it? Like if, if a lot of the things they fixed a lot of the out prior to the, the financial crisis, it was like 20 or 30% of, like, bank loans they were saying contained some kind of fraud. Even if it was just a lie. You know, if you want to cut 30% out of this, out of the, you know that. That's a ton. That's a ton.

So you're on probation and you're doing these. You're almost getting caught. You're almost getting caught, and you're doing these really large scale scams. How does it get to the point where you're on the run?

So I'm doing multiple scams. Right. So it's not just that I'm doing the scams with the, the Reservoir Dog scams. Right. I'm not just doing those guys.

Yeah.

I'm also.