Mortgage Fraud – this time from Jacksonville, Florida. Seems that Justin Barker, age 31 and Robert Hulbert, age 45, both pled guilty to conspiracy to commit wire and bank fraud. Barker just received his sentence – 7 years in federal prison – $2.3 million in restitution and $4.4 million in forfeited property jointly and severally owned with other conspirators.
Seven years and likely bankruptcy. So what does Barker has to show for his fraudulent activities? A convicted felony record? By it’s end 20% of his life in prison? Both?
The scheme operated in 2005 and 2006. Barker negotiated the purchase of residential real estate properties, either on behalf of himself personally, on behalf of an entity he controlled, or on behalf of a third-party buyer. Barker, the entity, or the buyer entered into a purchase and sale agreement with the seller of the property. Barker then retained a licensed real estate appraiser to appraise the property at a significantly inflated price. The appraiser would appraise the property at the price that Barker requested, using inappropriate comparable properties and other fraudulent methods to obtain the price requested. At the closing on the property, Barker or an entity controlled by him would receive the difference between the loan amount, which was based on the inflated appraisal, and the actual purchase price, usually described with terms such as “assignment fee” or “payoff of second mortgage” that did not exist. This difference was the proceeds of the fraud.
During the course of the scheme, fraudulent loans totaling about $17.7 million were obtained on more than 40 properties. These loans would not have been approved but for the fraud. Barker received approximately $4.4 million in gross proceeds from the fraudulent transactions. To recover some of these illicit proceeds, the government seized from Barker a 2004 Bentley Continental, a 2007 Cadillac Escalade, a 2002 BMW 745Li, a 2005 Chaparral 330 Signature 36’ boat, a 1997 19’ Wellcraft boat, a 2006 Yamaha motorcycle, a 2001 Yamaha motorcycle, a 2-carat loose diamond, a 1-carat diamond necklace, a .5-carat diamond necklace, diamond stud earrings, and two Movado watches.eds of the fraud.
Every choice has a consequence! As a white collar crime and ethics speaker, Barker is a prime example of choices gone bad – very bad! There is a statement that is true – you will reap what you sow. While these next comments I am not proud of, but having spent time in federal prison for poor choices, I know first hand the answer to the question – was it worth it? The answer – a resounding – NO!
Barker will find that federal prison is no fun. Some call it “club fed” – let me say…it is fed – there is no club to it. Working every day for 12 cents per hour cleaning toilets and urinals is nothing that anyone would do at the “club.” My guess – Barker will have time to figure out a lot about himself. Perhaps, like me, when he emerges he will have a different perspective and can use his new found wisdom to benefit others.
More Mortgage Fraud reports to come…
Your comments are welcome!