Maverick Residential Mortgage – From #1 to Implosion In ONE Short Year! Comments By Ethics and White Collar Crime Speaker Chuck Gallagher

I recall with vivid detail my first meeting to a wonderful organization – Success North Dallas. As I entered the room as a guest I noticed with keen interest the gathering of a large group of movers and shakers in the greater Dallas, Texas area business community. Frankly, I feel pleased to have been invited.

That particular meeting recognized a young man who caught everyone’s attention – Bob Johnson – the Chairman and CEO of Maverick Residential Mortgage – who had just been named by the Dallas Business Journal as one of the top 100 fastest growing businesses in the area.

News Release from 2007: Maverick Residential Mortgage, Inc. was selected as 48th highest winner of the 2007 Dallas 100 Entrepreneur Awards at an impressive awards banquet Nov. 7. Executives and representatives of Maverick learned of their impressive finish at the gala held in the Morton Meyerson Symphony Center in the Arts District near downtown Dallas.

Sponsored by the Caruth Institute for Entrepreneurship at the SMU Cox School of Business, the 2007 Dallas 100 Entrepreneur Awards honor the 100 top entrepreneurial businesses in the Dallas market.

Maverick Mortgage, one of the nation’s fastest growing and most dynamic privately held firms, was named the number one ranking company among the 60 fastest growing firms in Collin County last May.

“Barrett Owens and I are indebted to each and every one of our executives, loan officers and support professionals in all of our branches nationwide and in our corporate office,” said Bob Johnson, Maverick’s Chairman and Chief Executive Officer. “To finish as high as we did in the mortgage profession that has seen more than 180 companies close its doors is a tribute to our people’s commitment to fair business practices, dedication to doing their jobs to the best of their ability and beyond, and to their undying accountability to customers and industry partners such as builders and realtors. I hope that every Maverick holds his and her head high in the aftermath of this impressive ranking.”

Now, less than one year later CBS 11TV reports that Maverick has put out an official statement that informs us of the complete shutdown, 401K information to former employees, with a back-date to January 16th.

Dated January 26, 2008 – “Maverick is closing and your employment is terminated effective January 16, 2008.”

What Happened? According to a report from Jack Fink – CBS 11 reporter the following quotes were used in an article (a full copy can be see through the above link):

Maverick CEO Bob Johnson acknowledged the company couldn’t meet its payroll because of major cash flow problems. He said they discovered the cash crunch last week.

“We had no clue it was coming,” said employee Greg Baker. He said he’s beginning to wonder how he’ll put food on the table for his wife and three young sons.

“Everyone was stunned. There were tears. There was shock,” he said.

“We’re definitely trying everything we can to be able to handle that and that’s part of where we are right now — is getting our arms around how much cash we do have available for those individuals,” said Johnson.

Toward the end of January it was reported that both federal and state investigators are looking into why Maverick Residential Mortgage shut it’s doors.

According to a CBS 11 report:

In a letter to employees dated Jan. 25, company CEO Bob Johnson said that the payroll could not be funded because Maverick Residential Mortgage has “experienced unforseen business circumstances” and that their “employment is terminated effective Jan. 16.”

Now, the company’s CEO has asked federal and local law enforcement to investigate. Johnson said that the issue will not be resolved quickly, but he is committed to clearing Maverick Residential Mortgage’s name.

Back To Our First Meeting. Like most I was startled by the announcement. However, I recall the meeting with Bob Johnson at Success North Dallas. We were introduced and politely he asked what I did. My reply – I help companies avoid white collar crime. As a business ethics speaker and white collar crime speaker – my job is to help companies understand how white collar crime takes place and implement programs to thwart fraud like that from happening. His response – “Hum, we’ve got a strong company, but maybe there’ll be a need for an ethics program some day.” And with those comments, he moved to another participant in the meeting, all of whom seemed to be lauding praise on his company and accomplishments.

Too Late! As a business ethics and white collar crime speaker, (www.chuckgallagher.com) I find that all to often, corporate executives seem to think that actions like what Maverick Residential Mortgage experienced won’t happen to them. Every choice has a consequence. While fraud happens – there are steps that can be taken to minimize the likely-hood of white collar crime closing the doors of your company. While I regret what happened and the casualties that followed, I wonder if the outcome could have been prevented.

For now, law enforcement will have to do its job and there will clearly be more to come.

Your comments are welcome!

Doing More Crime While Serving Time – Inmate Get 12 More Years for Creative Prison Crime!

Seems that some folks just don’t get it. I mean you’re an inmate in federal prison and so, with some time on your hands, you decide to cap off your free time with more crime. Oops…maybe I get it – this person just likes the three squares a day and new lifestyle he found. Anyway here’s the story…

Robert Daniel Davis – a 54 year old inmate at the Beaumont Federal Prison in beautiful Beaumont, Texas – was sentenced to an additional 12 years for filing a false lien.

Stop…as soon as I read this I asked myself – how can an inmate file a lien? Afterall, he was an inmate…not like he can just walk out get in the car and go to the courthouse to file the lien.

According to information presented in court, while imprisoned at the Federal Correctional Complex in Beaumont, Davis created and forged groundless Uniform Commercial Code (UCC) financing statements in the amount of $500 million against U.S. District Judge Sim Lake on June 21, 2004 and Assistant U.S. Attorney Glen Cook on May 27, 2005. Judge Lake and AUSA Cook were involved in Davis’ previous federal drug conviction in the Southern District of Texas which led to his incarceration in Beaumont.

Judge Lake and AUSA Cook stated they did not sign or authorize the creation or filing of the UCC/TCA FS-4 “True Bill” which bear their names and a reproduction of their signatures and have never had a financial or contractual relationship with Davis. Davis told investigators he filed the fraudulent lien against Judge Lake because the Judge allowed the prosecuting attorney, AUSA Cook, to perjure himself during his trial and did nothing about it. Davis stated he filed the fraudulent lien against AUSA Cook because Cook lied about the amount of drugs Davis was being prosecuted for.

Hum…I get it – the inmate ticked off at the judge and the prosecutor creates (interesting how) fraudulent documents and forges their signature – then somehow gets these documents filed in order to create financial havoc to the two men in question. I’ll give him recognition for creativity but major kudos for stupidity.

While I am not proud to say this, but I do acknowledge I, too, have been an inmate in federal prison – allbeit in 1995. Wow, things must have changed a bit. Then inmates had access to paper, pen and electric typewriters. There was no access to computers, copy machines, or any other document creation material. Now, maybe I’ve become too disconnected, but I can’t imagine how one could create a legitimate looking lien with just a simple typewriter. But, perhaps some of the readers might want to comment.

Today, I am a Senior Sales Executive in a public company and a business ethics speaker (www.chuckgallagher.com) sharing the message of choices and consequences. Every choice has a consequence. Davis in this case got to see the consequence of his choices through the addition of 12 more years. If he leaves prison alive he surely will be an old man. Hopefully, through the presentations I make others will come to know the Truth about Consequences.

While this blog entry might not be the most effective – it surely falls into the category – You Gotta Be Kidding!