False appraisals for property purchased in the Dallas / Fort Worth area lands Gandhi Ben Morka a 60 months federal prison sentence and a $2.3 million restitution bill!
Background: Seems that Morka, age 52, from Arlington, TX was convicted on one count of conspiracy to commit mail fraud and wire fraud, four counts of wire fraud and two counts of mail fraud. The government presented evidence at trial that Morka conspired to defraud Countrywide by locating single family residences in and around the Dallas, Texas area that were for sale and recruiting straw purchasers and borrowers to purchase the targeted residences. Then Morka would prepare appraisals on the properties, inflating the value to an amount far greater than the fair market value, double in most instances.
Every choice has a consequence. As a business ethics speaker, (www.chuckgallagher.com) I find that more and more as I speak to financial institutions the theme of mortgage fraud rears its ugly head. There are three components to most frauds: (1) need or perceived need; (2) opportunity; and (3) rationalization. As we entered the era of easy credit and sub-prime mortgages, there was almost too much opportunity and without effective controls in place the landscape was ripe for fraud.
Now as we see the pendulum swing the other way the crimes that have been committed are coming to light. Morka has been in the custody of the bureau of prisons since his conviction in late August, ’07. With the time he will be facing, he will be able to reflect on the effectiveness of doing a proper appraisal – although that service he will likely be prohibited from ever doing again.
Business Ethics Speaker – Chuck Gallagher – signing off…