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
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
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
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
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,
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]