For the first time, a federal appeals court has applied a broad definition of “crime victim” to financial fraud in the case of 112 borrowers in a Florida mortgage loan scam. This ruling will entitle far more people to seek restitution for economic crimes. The 11th U.S. Circuit Court of Appeals precedent, holding that borrowers are protected victims under the Crime Victims Rights Act, is most significant. This comes at a time when financial crimes dominate the front pages. The result in this case will be important for any victim of financial crime, potentially including people victimized by money manager Bernie Madoff.
The Appeals Court rejected both the government and Defense argument that only the bank could be considered the victim in the case. The majority of the Court held that the Crime Victims Rights Act defines victim as any “person directly or proximately harmed,” extending protection to borrowers, although they were not included in the criminal charge or identified in the plea deal. The scheme was in closing costs from each mortgage contract among a developer, borrowers and the bank. Without disclosing the extra charge to the bank, the borrowers were charged two points, rather than one, to close deals. The proceeds were split between the two Defendants.
As many as 700 borrowers became investors, signing up for construction mortgages with the intent to flip the finished homes for quick sales. Many of them lost money when the real estate market blew up and some homes were not built. They were solicited from investment clubs, individually and over the Internet. The investors in this case were represented by Alan E. Tannenbaum of Levin Tannenbaum in Sarasota, Florida and former federal judge Paul G. Cassell of the University of Utah S.J. Quinney College of Law. They did a very good job for their clients.
Source: National Law Journal
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.