Earlier this year, Christopher Jared Warren posted an online confessional.
He said he had helped ruin the U.S. economy. At 26, he described how he had gotten rich off of lies, and how he and his colleagues had defrauded mortgage holders of millions. He asked for mercy.
Then Warren split. Using a fake name, he chartered a plane to Beirut, Lebanon, and a five-star resort on the Mediterranean Sea. Five days later, he tried to come back, but Canadian border patrol officers arrested him — with $70,000 in cash and 4 ounces of platinum in his cowboy boots.
When a $100 million mortgage scam involving Warren exploded weeks later in Sacramento, Calif., the federal government's indictment highlighted one wholesale mortgage lender in particular that Warren had defrauded: Taylor, Bean & Whitaker of Ocala.
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Taylor Bean, the FHA lender that fell apart and put 1,000 employees in its Ocala headquarters out of work this week, lost $7 million to Warren and his colleagues.
It's unclear what role Warren's scam played in triggering a broader investigation into Taylor Bean or expediting its demise. Indeed, Taylor Bean's woes were much deeper: Federal agents said the company had "irregular transactions" that raised concern about fraud.
But the relationship between Taylor Bean and Warren's company, Triduanum Financial Inc., sheds light on how the system worked, or rather didn't work. The combination of a shady mortgage lender and a lack of oversight from the company that bought its loans turned into a toxic mess.
Taylor Bean relied heavily on brokers and "correspondent" lenders — like Warren's company — to originate their mortgage loans. Then, as a wholesale mortgage lender, Taylor Bean financed the loans by tapping into a line of credit with other financial institutions. Its chief source: the now deeply troubled Colonial BancGroup.
Taylor Bean dealt with many loans that banks wouldn't touch. It was one of the few lenders handling FHA loans for manufactured homes. In the first half of 2009, when many banks were tight on lending, Taylor Bean approved $17 billion in mortgage loans and was the third-largest FHA lender in the country.
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Warren's seven-page essay, posted on his mortgage company's Web site, detailed his life as a mortgage "fraudster."
In it, he said he was 19 when he was hired at the now-defunct Ameriquest Mortgage Co. His "predatory" division focused on refinancing homeowners who had obtained loans in the past two years.
He became a top-producer. Most months, he sold $5 million in high-interest loans and earned $30,000. "My managers and handlers taught me the ins and outs of mortgage fraud, drugs, sex, and money, money and more money," he wrote.
His manager, a friend, handed out the crystal methamphetamine to keep loan officers up and at work longer hours, he wrote. In between trips to the bathroom to do drugs, he and his colleagues pushed through millions of dollars in loans by falsifying people's incomes.
"A typical welcome aboard gift was a pair of scissors, tape and white out," he wrote.
He even hacked into the Ameriquest computer to approve his own loans.
At 22, he left the company with its entire customer database and started his own mortgage company. He operated in six states, including Florida, and continued the fraud, faking credit scores and income on mortgage applications.
"As a 22, 23, and 24 year old with no credentials, I made over $2.25 (million)," he wrote, "all of which was spent on 24 cars … 5 houses, drugs, 1 engagement and split, 1 300 person wedding and two kids."
When that company collapsed in 2007, he went to work for another company that federal investigators say was essentially a Ponzi scheme built upon real estate fraud. It stretched through five states, involved about 500 properties and led to $100 million in losses.
According to the Treasury Department, here's how it worked: Warren and other directors of a company called Loomis Wealth Solutions held seminars, luring investors with the promise that they could use their home equity to help them get out of debt.
Initially, investors bought a life insurance policy through Loomis. Then they were enticed to move into higher "tiers" of involvement. In the second tier, investors liquidated their home equity with the promise the money would be invested through Loomis without tax consequences.
The money went into a fund that allegedly would be loaned out to subprime borrowers, giving investors a 12 percent return.
Fund investors received periodic statements that showed their balances increasing by the promised 12 percent. But when regulators seized Loomis' records last August, they discovered the fund, which had taken in millions of dollars, only had about $1,700 in its account.
Last September, Warren began talking to authorities.
"The complete operation was highly illegal," Warren wrote.
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Warren's last company, Triduanum Financial Inc., entered Taylor Bean's universe last October — as the financial services industry was in utter upheaval. Triduanum applied with Taylor Bean to become a correspondent lender, meaning it could fund and close mortgage loans in its own name and then sell the loans to Taylor Bean within a few days or weeks.
In a two-month period — from Nov. 26 to Jan. 27 — Taylor Bean bought 30 loans from Triduanum that were never actually closed.
Warren and a partner redirected $7 million from those loans to gold bullion dealers, a Swedish bank account, a jewelry company and rare coin dealers.
In a lawsuit against Triduanum, Taylor Bean said it was misled from the get-go. Triduanum's application was rife with omissions and lies.
But Taylor Bean didn't catch those lies and oversights before it gave the company authority to start making loans.
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When Warren fled the United States earlier this year, his lawyer called it "incredibly idiotic." When he returned, everyone speculated about what he was thinking.
"No one knows for sure what was in his head, why he did that," said Lauren Horwood, a spokeswoman for the U.S. Attorney's Office in California, which is prosecuting the case. "He probably thought he could get away with it. He's pretty arrogant. Smarter than the average person, he thinks."
Warren is now at the Nevada County Jail in Nevada City, Calif., awaiting trial on charges that include money laundering and identity theft.
"Built a fraudster by my trainers in corporate America. Mastered the fraud. Trained others in the fraud," he wrote in his essay, "and it utterly disgusts me."
In that same essay, Warren said the answer to mortgage fraud was better trained regulators. Instead of focusing on prosecutions, he said, put more qualified people in the business of regulating the mortgages at the outset.
"I am the man for the job, Chris Warren … "
Times researcher Shirl Kennedy contributed to this report. Leonora LaPeter Anton can be reached at firstname.lastname@example.org or (727) 893-8640.