Trade Commission in 2010 over allegations that
Countrywide had been gouging distressed borrowers
on prices for default-related services. Mozilo only
made matters worse with his behavior, one time
famously replying to an email from a homeowner
seeking a loan modification (he had meant to forward
it). In his reply, he called the plea “unbelievable” and
Bank of America acquired Countrywide in 2008
for $4.1 billion, but the company’s legacy of alleged
wrongdoing ended up costing much more over the
For his part, Mozilo maintains to this day that
he and Countrywide did nothing wrong, telling The
New York Times (through his attorney) that he “built
Countrywide to help people purchase and stay in
homes they could afford” and that he has always
“been deeply troubled for the many borrowers who
played by the rules and who still suffered during the
It’s a toss-up over which is more baffling: the
scale of fraud committed by Taylor, Bean & Whitaker
(called “one of the longest, largest fraud schemes”
but one assistant U.S. attorney) from 2002 to 2009, or
the fact that the company and its owner, Lee Farkas,
were able to pull it off for so long.
The story starts in 2002, when Fannie Mae cut
ties with Taylor Bean over the sale of eight fraudulent
mortgages, all of which were taken out by Farkas
himself, who explained at the time that he was trying
to cover the company’s overdraft after loans it had
previously sold came back as repurchases. In his own
defense, Farkas said that the mortgages were never
supposed to be sold, but rather that they were to
help him keep track of the overdraft.
While that was it for Fannie, Freddie Mac and
Ginnie Mae continued to work with Taylor Bean—
up until 2009, when it came out that the firm had
continued to finance itself over the years through
loans on hundreds of millions of dollars’ worth of
property that didn’t actually exist. Ginnie and Freddie
both suffered in the fallout, as did Deloitte & Touche
and PricewaterhouseCoopers, who stood accused of
failing to spot any wrongdoing in their auditing of the
Currently, Farkas is serving a 30-year prison
sentence, with six other alleged participants also
receiving punishment for their parts in the scheme.
Whether he and his accomplices really learned their
lesson is unknown, but the GSEs apparently aren’t
there yet—in 2014, the Office of the Inspector
General for the Federal Housing Finance Agency
warned that Fannie, Freddie, and Ginnie all remained
vulnerable to similar schemes.
JAMES TYSON JR.
This story has the makings of a Hollywood
drama: celebrities, criminal networks, and an FBI
investigation, complete with a code name.
In 2015, James Tyson Jr. went to prison for his
alleged role as ringleader in a vast fraud conspiracy
that saw 90 other defendants also facing charges.
The sentencing was a victory for Operation Wax
House, the name given to an FBI- and IRS-led
investigation of a network of housing professionals—
including mortgage brokers, home builders,
attorneys, and more—who allegedly tried to trick
potential investors (including professional athletes
and celebrities) into purchasing luxury homes at
an inflated price, with the schemers pocketing the
difference between the home’s actual value and the
loan taken out.
The network would also employ straw buyers,
misrepresenting their life situations and ability to pay.
All in all, charges involved in the case include
racketeering, running a criminal enterprise engaged
in investment fraud, mortgage fraud, money
laundering, and the distribution of illegal drugs.
URI GOFMAN AND TONY VIOLA
While the other names on this list stand alone,
this particular fraud scheme had two masterminds.
In 2012, Cleveland-based Uri Gofman pleaded
guilty to a mortgage fraud scam run through
his company, Real Asset fund, which purchased
hundreds of homes and artificially inflated their value
by falsely documenting improvements made to them.
Partnering with Tony Viola and other local real estate
agents, he then allegedly used false documentation
and fraudulent down payments to sell the homes to
unqualified buyers, bilking lenders out of $44 million
in loans, according to Cleveland’s Plain Dealer.