Make us your home page

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Fla. called No. 1 in mortgage fraud

TAMPA — A national report released Tuesday said Florida leads the nation in mortgage fraud. Within the state, Tampa is second in the amount of suspicious loan activity.

As the report was being released, a federal jury in Broward County was returning guilty verdicts in a scam case that included $5-million in fraudulent mortgages.

Howard Gaines, a lawyer who worked as a title agent, was accused of falsifying closing documents.

Gaines has not been charged in connection with any of his work in Hillsborough County, where he processed one-third of the home sales by a Tampa tattoo parlor owner named Sang-Min Kim.

Sonny Kim, as he's known, was profiled in a St. Petersburg Times story Sunday that recounted his flipping of properties, about one-third of which have been foreclosed. The story pointed to some questionable mortgages, including one for $300,000 on a run-down house that now can be had for $35,000.

Gaines has not been charged with any crimes in connection with his work with Kim.

In the Broward case, prosecutors said Gaines, as a title agent, aided his co-conspirators in falsifying closing documents that made it look like borrowers could repay loans. When they didn't repay them, banks such as Wells Fargo, Wachovia and Washington Mutual were left with big losses.

Gaines, 57, was convicted of one count of conspiracy to commit mail and wire fraud and two counts of mail fraud. He is scheduled to be sentenced in February. The maximum sentence is 45 years in prison. His attorney, Stephen Binhak, did not return a call seeking comment.

"I'd like to see him get more prison (time); he's done some bad things," said Doug Pollock, a property crimes expert who testified in the trial after reviewing several sales processed by Gaines' title company. "I think some prosecutor (in Hillsborough) will use this conviction to say, 'I want a piece of him, too.' "

The U.S. attorney in Tampa would not comment specifically on Gaines or Kim.

"I do think (Sunday's Times) story raises some concerns," said U.S. Attorney A. Brian Albritton. "The allegations that were made would fall in the range of something that our office would be interested in."

State authorities also declined to say whether they are investigating Kim or Gaines.

"This is being investigated by the appropriate authorities, but we can't comment further about this case," said Jerri Franz, a spokeswoman for the Florida Department of Financial Services.

Since 2004, Kim has bought and sold about 90 homes in some of Tampa's poorest neighborhoods. Property records show buyers paid Kim $10.7-million for homes he bought for $6.5-million.

Many homes that Kim sold ended up in foreclosure, meaning that many of the same banks that are now getting billions in a federal bailout were left with worthless property.

About half of the sales Gaines handled for Kim ended up in foreclosure when the borrowers defaulted on their mortgages.

Albritton said his office's numbers echo the report published Tuesday by the Mortgage Asset Research Institute in Reston, Va., which put Florida first in the nation in mortgage fraud and Tampa with the second-most cases of suspicious loan activity behind only Miami.

In October, a Clearwater man prosecuted by Albritton's office was sentenced to 10 years in prison and ordered to pay $6.5-million in restitution for mortgage fraud. In June, the office, then under the direction of U.S. Attorney Robert O'Neill, indicted four others in a commercial mortgage fraud scheme.

"Mortgage fraud, in its essence, comes down to lying," Albritton said. "The goal of this office, given the resources that we have, is to find the most significant cases involving those lies."

The FBI said it couldn't comment specifically about Kim or Gaines. "However, we would reassure the public that the FBI views mortgage fraud as a significant and growing crime problem," said Dave Couvertier, a spokesman for the Tampa FBI field office.

"Combating significant fraud in this area is a priority for us."

Staff researcher John Martin contributed to this report. Michael Van Sickler can be reached at (813) 226-3402 or

Fla. called No. 1 in mortgage fraud 12/02/08 [Last modified: Wednesday, December 10, 2008 5:37pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. No. 21 USF Bulls roll over Temple to stay undefeated


    TAMPA — They emerged from Raymond James Stadium's southwest tunnel on the 11-month anniversary of their public humiliation at Temple.

    Bulls tailback Darius Tice, who rushes for 117 yards, is elated by his 47-yard run for a touchdown in the second quarter for a 10-0 lead.
  2. Fennelly: USF thrashes Temple to stay unbeaten; too bad not many saw it in person



    No. 21 USF ran its record to 4-0 Thursday night with some payback against Temple, a 43-7 trouncing, no contest, as if anyone cares, at least judging by the paltry crowd at Raymond James Stadium. Where was everybody?

    Bulls cornerback Deatrick Nichols (3) celebrates with teammates after making a defensive play during the first half.
  3. Former Ray Tim Beckham's over being traded, or is he?

    The Heater

    BALTIMORE — As the Rays reunited Thursday with Tim Beckham for the first time since he was dealt July 31 to Baltimore, it became very clear that not everything in assessing the trade is as it appears.

    Tim Beckham, here in action Monday against the Red Sox, has hit .310, with 10 homers and 26 RBIs since going to the Orioles.
  4. Bucs probe how to fix deep-ball chances missed vs. Bears


    TAMPA — It was only minutes after the Bucs had demolished the Bears 29-7 Sunday when quarterback Jameis Winston tried one final time to connect with receiver DeSean Jackson.

    QB Jameis Winston says he’s focused on the deep-ball chances to DeSean Jackson he missed in the opener: “We left a lot out there.”
  5. Rays journal: Ugly first inning dooms Andriese, Rays against Orioles (w/video)

    The Heater

    BALTIMORE — Rays manager Kevin Cash said before Thursday's game that RHP Matt Andriese was among the pitchers who would most benefit from a strong finish to the season.

    Matt Andriese has a tough first: hits to four of first five batters, leading to three runs, the only ones he gives up in six innings