Life-saving lessons: The diary of a mortgage felon: The moral of the storyJerome MayneMail fraud,wire fraud,money laundering The following article is part of a series by Jerome Mayne, a former mortgage broker who served two years in a federal prison, charged with conspiracy to commit mail and wire fraud. Since his release, Jerome has made numerous presentations across the country, detailing his ordeal and offering suggestions on how to avoid similar situations. For previous articles, visit www.mortgagepress.com, and for more information, visit the author's Web site at www.maynefelon.com. Present day, 2004 For the past year, I have submitted portions of my journal and personal letters to be published in The Mortgage Press. It has been a chronological account of my crime, punishment and consequences. I wish it wasn't my story. However, I have published these entries in the hope of raising awareness about the consequences of committing fraud. I have received an enormous amount of positive, constructive feedback. Many of you have reflected on your own activity and history in this business. I would like to thank you for following along. I have found it quite enlightening. Crime and punishment In December of 1998, the FBI took me into custody, and I was indicted by federal prosecutors for conspiracy to commit mail fraud, wire fraud and money laundering. The crimes took place over a nine-month period in 1994, while I was a loan officer at Norwest Mortgage (now Wells Fargo) and accepted referrals from a group of real estate investors. Subsequently, during my pre-trial hearings, I learned of fraudulent activity that included the submission of false documents, filling out false verifications and drafting fraudulent purchase agreements that affected phony transfers of title. Among other things, I withheld some of that information which would have effected the credit decision of the underwriters from the loan application. In August of 1999, I plead guilty to federal charges of conspiracy to commit mail and wire fraud. On Nov. 4, 1999, I reported to federal prison. One of the reasons I chose to plead guilty was because I knew I had done things that were illegal and ethically wrong. In the eyes of the law, I was involved in this conspiracy. In addition to the information I withheld, I was also a purchaser and seller of a property that these investors were involved with. There were elements of this transaction that were fraudulent as well, leaving paper and money trails between myself and the real estate investors. Had I not plead guilty, the money laundering charge would have stuck, I would have lost at trial and ultimately received a much longer prison sentence. With two young children, I just couldn't handle being away for seven years. A major point I have been trying to convey in my articles is that there is more to a prison sentence than the words from the judge at sentencing. When I pled guilty, I thought my sentence was going to be several things: 21 months in prison, two years of probation, $144,000 in restitution, revocation of my constitutional right to vote for three years and nine months, and the life-long revocation of my constitutional right to bear arms. I never saw myself as a criminal because I didn't set out to commit a crime. I saw myself as "Joe American." I saw myself just as many of you do--as entrepreneurs, salespeople and finance professionals with friends and families. I made a series of stupid choices and found myself in the middle of a fraud scheme. If you have read my previous columns, then you know how these choices can catch up with you in a big way. This is my point: If you cut corners or flat-out commit fraud, it is a choice you make. It can and will change your life forever. I am not innocent; I admit to doing the crime, so I pled guilty and agreed to my sentence. It has now been about 10 years since the commission of my crime and three years since the end of my official prison sentence, yet the nightmare is still not over. Fraud and consequence My legal sentence has ended, except for my financial responsibility of having to pay restitution. However, my punishment continues; the unwritten sentence haunts me. This condition is something you don't hear about on the news or even from the judge. Here are a few examples of my crime's lingering impact: The stigma follows me. The feeling that you are a bad person is hard to rise above. It was most prevalent for me in the first few months after my release from prison. Whenever I would walk into a bank, I worried that the tellers, managers, guards and even the customers were watching me. At any moment, I expected them to deny me service or arrest me. Also, I would turn away from police or police cars whenever they would walk or drive by. I couldn't resist the urge to confess my conviction to people I met. I did this just in case they found out later and then wondered if I was a societal imposter. Sometimes this would actually happen, which did not help my self-confidence. The financial restitution itself shows up as a federal judgment, i.e. a lien in the county records. It also shows up as a judgment on a credit report. This is something I didn't think of when I pled guilty. I recently had to move out of a neighborhood because there was drug activity going on by the house I was renting and some stray bullets made their way into my front door. I absolutely had to move my family. However, I could not qualify to rent another home because every time I applied, I was asked to explain this large federal judgment. I always told the truth, and I was always turned down. Before I decided to lie about the judgment, I met some incredible people who felt that I didn't need to be judged again. It is rare to get so lucky. My probation is finally over, which means that I don't need permission to leave the state anymore. For the two years after my prison sentence, I had to carry a piece of paper, issued by the United States Probation Office, any time I left the state. I, a grown man, had to get permission every two weeks to pick up my kids for my weekend visitation. They live with their mother in a Wisconsin town less than a mile across the border from Minnesota. It took me less than 15 minutes to pop in and out of my neighboring state. Yet, as a child in the eyes of my government, I needed supervision because I couldn't be trusted to follow the laws of the land. I was a child watching children. I may not have planned the fraud scheme I was involved with, but I still knew right from wrong. Clearly, I chose wrong. I didn't know my choice would lead to such a horrifying life path. I know my situation was more serious than this, but imagine a man who takes a shortcut through the woods that is clearly posted with a "No Trespassing" sign. The sign is there for him to see, yet there are no skulls, corpses or other indications of the tragedy that has befallen the carefree souls who crossed there before. Sure, he's heard the tale of a trespasser who found himself staring into the hollow end of old man Bjorklund's shotgun. But that was out East, or West, or something. So the man chooses to break the rules and take the shortcut. Many of my fellow prisoners remarked that prison life was very similar to the military. Physically and mentally, it can beat you down. Sometimes your life is in danger. The rules are strict; the food is bad; the work is tedious. You can enjoy the camaraderie of hundreds of crass, smelly, hairy men. The folks in charge are sometimes less than management quality. Even the khaki uniforms we wore were military surplus. But there is no honor--ever. Are these direct and incidental consequences fair? I didn't think so. But it doesn't matter what I think. It doesn't matter what you think, either. This is reality. This is how it works. If you choose to cross the line as I did, these are the consequences. The title of this column has been, "Life-saving lessons: The diary of a mortgage felon." My story and my mistakes are supposed to teach a lesson, and I share them with you with the hope of preventing others from going down the same path. These are indeed life-saving lessons. The good news is that this is a great industry and your life doesn't have to get ruined for being a part of it. You don't have to be greedy or stupid. You don't have to cut corners. There are easy qualifying loan programs, along with great education training. There is plenty of money to be made out there in the old-fashioned, honest way. Some of these loan programs may seem like an invitation to commit fraud (can you say "stated income?"). Let me assure you, these programs are not invitations to commit fraud. I know. I've spoken to people who designed them. I have also spoken with some people who've accepted the invitation. Resting on your morals So, here's the moral of the story: You have the opportunity, each and every day, to omit facts or turn the other way. Some of you have already done this, and truly believe that it's no big deal. Maybe you were trained that way and don't know any better. Maybe you think that everybody does it and that nothing is going to happen. You've been in this business for 15 years and have helped a lot of people purchase homes. Or, you're a manager or trainer. Maybe you have two kids and are an outstanding citizen and even volunteer at the local elementary school. That's great. But the opportunity is still there and therefore, you're still at risk. For what it's worth coming from a mortgage felon, always be ethical, honest, diligent and consistent. Your family, friends and society need you to stay out of prison. "How do you plead to the fraud charges brought against you by the United States of America?" This is a question I know I'll never have to answer again. How about you? Jerome Mayne is a professional public speaker, dedicated to raising fraud awareness among finance industry professionals through presentations including "Fraud & Consequence." Jerome is currently writing a book of his experiences to be published by The Mortgage Press, Ltd. Advanced copies may be reserved online through MortgageProShop at www.mortgageproshop.com. He may be reached by phone at (612) 919-3007 or by e-mail at [email protected] or visit www.maynefelon.com.