Kind: captions
Language: en
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 what
for what I
go mostly bank fraud and she's like well
how are they not finding you mhm I mean
everybody you know people know you like
you know your general contractor which I
met 4 months before this guy 6 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 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 Alex Freedman 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 um you know if you
were to go in and say um I make $300,000
a year okay well we want your W2 we want
your pay stuffs 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 going
it's like ah your whole plan fell apart
you know because the average guy can't
do that he can't even come up with the
with the pace7 W2 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 did 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 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 ident
identity of how much you're worth how
much money you have this kind of stuff
right you have to be able to 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 it's in the gray area there's no
gray area you're either lying in some
capacity or you're not
so it's for instance the very first loan
I did I I wided out um my
borrower had been 30 days late on her
uh on a rent so they're really looking
at the last two years so when when you
go in the bank and they most of what
they're asking is a 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 um 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
consistent consistently paid for two
years well she had been in an apartment
complex but she'd been 30 days late now
she caught it up
but she was late Bank the bank doesn't
want to lend you money if if you've been
30 days late so I was a broker and I
whed 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 I you know I I was I was worried
you know I always say you know I sweat
bullets for you know four or five days
you know but I mean I I I was concerned
and and I don't know that I was
concerned that I had broken the
law uh 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
you'll get fired at 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 what it's funny cuz
I I I don't think I ever really
mentioned this it her name was uh
Gretchen Zas she eventually I don't mind
saying she eventually got ended up going
to jail for fraud her name was Gretchen
Zas and she was a manager I was working
for a company called Eagle lending and
it was in
Tampa and I 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 in front of
my manager she looks through everything
you know oh great good good and put this
one piece of paper over here mhm and sat
there and then when she was done I said
uh what's what's going on she goes
perfect files perfect she goes but your
borrow was 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 w thing a
white out the white out not the sticks
with the one and she started going and I
was like what she goes if I was you and
she handed she I'd wi 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 say 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 I trusted her I was like
okay and so I I did what she said I
stuck it in the file and I mean look
like I said for four or five days I was
like oh my God I'm so scared how old do
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 uh you know
I tried my I try to be
a uh try to be a an insurance adjuster
tried that for about a year year and a
half that didn't work out uh ended up
ended up working
construction for a few
years and you know so finally the girl I
was dating said you got to be a mortgage
broker you know she's 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 did she see in
you she said just you're a Salesman and
I was like cuz 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
Sun Trust 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 their options were over so what
end 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 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 up the
contract so now you're having to get
them to rewrite the contract or you're
have you're 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 they're you know 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 yeah I don't know why it's it's 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 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 escro 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 well
I mean when that went through you know
I I think a normal person probably would
have
said wow it was a onetime thing got away
with it I'm good but for me it just
emboldened me MH like I just got a chat
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 or his year-to
date of his pay St 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 3500 bucks he gets into a
house I'm doing him a favor you know I'm
doing God's work so I fix it 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 I can get you done now if
you were in bankruptcy or something
there's some things you just you 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 um
you know fixing verif 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 um 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 uh writing a book my
book and that kind of you I started
reflecting on what I had done you know
and the truth is
like and this is a horrible thing to say
cuz 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 an house they shouldn't be
allowed to borrow they're not in a
position financially you know and 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 broker fee 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 8 and a quarter you know 8.25 then
I get 1% of the loan back as a fee so if
I charge them
85% I get two points back so if it's a
$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 $100,000 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 feels
like there is it well every time I
changed 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 and 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 uh creating fake
identities what do 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 bureau is already
know who you are right but the truth is
the first time the credit bureau has
ever heard about you was 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 ended
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 um to the owners of The Lending
institutions and the banks and you're
talking to all of the account Executives
and 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 uh
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'
you've heard the term liar loans okay um
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
insurance 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 we caught a
fake W2 I'm like what do you what do you
mean yeah your your broker soand so sent
us a file and this person had there's
two fake W2s and we're assuming the pay
subs are fake and I'm like are you
serious how 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 I
now I know every W2 has to have a
matching uh tax ID number for whatever
corporation uh issued it so there's a
sequence of checks they do to detect
fraud on different documents like W2s
and then you're slowly learning slowly
yeah exactly what's the process for
detecting I mean I had a pretty good
understanding anyway yeah but so I'm
starting to learn that 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 7 50
credit scores I mean it was perfect and
she came in and uh 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 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 ask for these things so and he
was like and 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 um so I 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 I just 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
mhm how are how did you 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 for 10
years 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 used her husband's I mean his
surname for 10 years so she has no
credit under her maiden name MH but when
they got divorced she switched to her
maiden
name um because when she pulled tried to
get anything in her in her um 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 y 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 preapproved credit cards
so she she goes but I knew I had applied
there using my son's 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 in
his social security number
and we caught it and she got a house in
that name we we closed it I just was
like wow like this is great can I ask
you a question about that 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 2 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 uh
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 in
into it but she
basically explained it to me and I 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 and into
our file cabinet and grabbed some
people's uh 1040s which we had you
know their tax returns and looked up
children's Social Security numbers and
just grabbed some random kid 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
they 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 call up and I say hey uh yeah
I was I'm uh never had a social security
number issued 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
uh yeah you have a bank account yeah you
have a Social Security number uh 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 um my
son is seven years old or three 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 uh get your son
come in here no I'm not doing that hang
up call back so I called back probably
times and
eventually uh someone said I I kept
altering it kept altering what I was
saying till I got to the point where I
was saying
saying my son was born with a midwife
not in the hospital and the pediatrician
told us that we needed to go we need 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
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 um 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 his shot record
and you can come in fill out the
paperwork we'll get 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 uh where
you make a copy it 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 a fake birth
certificate it was great too because
like the county actually they give you a
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
U two months later he got these shot six
months later he got these shot so I just
filled it out I even had to order a a
seal so you have to have a seal that
says like Hillsboro 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 um records and then I took like
220 grit sandpaper and and 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 could see Richland County you know
you you could kind of see that and
really they just grab it and they go
like this this is what you realize after
you when I started getting started
getting uh driver's licenses issu issued
by uh by the State DMV right the state I
I figured out eventually it was easier
to just go into the DMV and have them
give me a a driver's license then
actually make one so but you notice they
would just grab the thing they'd 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 lwh hanging fruit of
crappy fraud right yeah this stuff was
right through so okay so so birth
certificate gets you a uh Social
Security number so it's it's it's
interesting because you've also you
you've done a lot of different
approaches to um 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 part is fake some part is real
sometimes and sometimes it's completely
all fake right cuz now I have the name I
have the social security number and
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'd just say oh my wife's last
name is this if it 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'd
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 1,000 whatever it was
and then once you start making the
payments I pulled the credit and a
credit profile shows up saying that this
31y old
man with a social security number that I
know was issued you know a couple months
ago has three three credit cards they
don't even say secure they just say
there's like this credit card is $500 it
was issued by Bank of America this one
was issued by Capital 1 this one would
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
cuz I figured at least in a year I'll
have a bunch of these secure you know
these um 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 could 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 my 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 a fraudster you
would you would probably just get credit
cards and maybe build up that history or
maybe try and borrow a personal loan uh
which is limited you know it's personal
loans are used to be you used to be you
could go
to uh an FDIC insured bank which borrows
money
those you know the personal loans they
lend out at the max $115,000 you know so
you could do that so you can go through
this whole process creating a fake
identity getting a card paying it off
building up credit and then you get
$115,000 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 uh maybe you could maybe get 20
30,000 and a bunch of little smaller
ones you know you get 7500 cuz I did I
did there was a $7,500 from City Bank
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
a Home Depot you get a th000 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 to leverage that perfect those
perfect credit profiles against
properties and I mean ultimately that's
what I end up doing and and so each one
of those identities was
worth you know a few million can you
explain how that works so uh to leverage
them against property so how does that
work with the mortgage so what I did
eventually I mean this would 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 The
Rails I was on federal probation and 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 it 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 eore
City so I was going to start flipping
houses in eore 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 a
hundred so I thought what I could do is
I
can I can buy these houses renovate them
and sell them to you know 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 payub 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 100
maybe I'll pocket 40 or 50,000 I don't
really have to do
anything but that seemed shortsighted so
I thought what' 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 of the property it 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
$100,000 well do you 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 um on the computer they never go out
to the property or they send someone out
they 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 a
$200,000 sales price well there's no
other house is selling for 200,000 near
this house so I thought if I want to get
these things apprais 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 the extra 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 an extra
$1,00
50 so I'm so it ends up being you know
$1,400 but the but the sale shows up at
$ 200,000 on a house that's a 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 um 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 can
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 I go ahead and I correct all that
so I correct it so now if you if you
review the appraisal and you're in
California or even if you drive your car
down your 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 not 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 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 inds
and signed for them almost all the
closings nobody ever showed up I just
showed up and said to the title uh 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 them 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 that man Matt thank
you so much and they would give it to me
and I'd go sit in the parking lot and i'
sign all the documents and i' wait an
hour or two and I'd come back in and say
here you go how 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 is
then 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 in involved well keep in mind
the appraiser almost never meets the
borrower never not even like 99.99 99%
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 5 years they were all was a lot of
there's a template yeah
exactly but I 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 um there's
so it it yeah it wasn't difficult and
keep in mind the a lot of the the
Brokers barely ever meet um meet the bar
they call in on the phone but it didn't
matter anyway cuz I'm walking and saying
I got a slam dunk deal for you and
they're like oh wow Matt you got the W2s
the pay dubs you've got all the you got
all their uh 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 almost everybody involved in this by
the time I was done was involved there
was 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
at 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 and this happened
with almost all of them was he would buy
five
houses so the guy but what happens the
basic design was I 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 a million dollars in his
name uh then of course then I go and I I
get um 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 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 I would find an article about let's
say like a 12C car pile up you know so
there's you know there a huge accident
on I4 it's very dangerous
so there's a 12C 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 didn't make a copy of the cut it up
make 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 uh 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 less 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
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
accidents 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 cuz I
kept making more and more of these guys
what was your just to almost like a
tangent what's your thinking process
there's a lot of cleverness going on
here so like uh 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 this a it's a very
interesting a very clever Innovative
idea so at first I I thought about
making like a 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 uh you
know primary mortgage insurance like
what if the primary mortgage insurance
like what if they try and claim cuz he
was dead or like I don't know I don't
know that side 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 uh creditors and you mail them they
stop contacting they wait to be no
located by or notified by the bankruptcy
court but my fear there is you know uh
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 a
sister I wrote you the letter it's a
one-time letter that seems to um tie up
all
exactly you know I can only know the ex
exactly how that you know what sparked
that is as much as there were so many
other avenues that I could have gone
that I was I just didn't know I but you
were thinking through all those
different Avenues are you mostly
thinking
alone I mean you know I had guys that 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 I think the
FBI said it was like 11 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 177,000 20,000
25,000 and you know the 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' done
so many houses at that point the whole
area shot up and the the FBI said uh we
did 1009 houses I don't think that's
true
but wow 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 ebore City ZIP code was
one of the top 20 fastest growing um
appraising areas in the country and you
know everybody was like oh that's mad
cuz this place is a dump like this is 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 ah
all the comparable sales have dried up
like when you left there was just
nothing even close to
200,000 you mentioned right before uh
telling the story of this elaborate scam
that you were on federal probation how
did that happen so I mentioned that I I
own the mortgage company yes right so I
I had started a mortgage company I had
maybe a dozen guys working for me and
and there was fraud you know like I
would say it wasn't all fraud but
whatever 60 70% of it was fraud that
that was going in there and from the
outside of that 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
um but but there was a considerable
amount of Fraud and you know it kept
getting you know it it became a game
right you know it you start you 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 underwriter's
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 gonna do
what am I you know what we could do we
could create create our own bank what
yeah here's what we're gonna do we're
going to go on like how do they know if
this Bank exists these people are in
California or they're in New York like
they don't know so what we're going to
do is we're going to go online and keep
in mind this is 20
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 ebore you know we cut and
pasted things that we like from other
Banks and we got a 1 1800 number you
could call or a 186 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 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 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 of them
turned into 130 we want to pay off their
car give them an incentive to
sign um they don't have still don't have
the money to buy it so we're doing all
kinds of insane things well at some
point
remember Gretchen Zas my um my old
manager yeah the original yes she came
and worked for me for a short period of
time and then she