U.S. District Judge William B. Shubb has sentenced Joel Blanford of San Ramon, Calif. to 30 months in prison, to be followed by three years of supervised release, for a mortgage fraud scheme, U.S. Attorney Benjamin B. Wagner announced. On Sept. 19, 2012, following a seven-day trial, a jury found Blanford guilty of six counts of mail fraud. This case was the product of an investigation by the FBI and the Internal Revenue Service-Criminal Investigation (IRS-CI). Assistant U.S. Attorneys Paul A. Hemesath and Michael M. Beckwith prosecuted the case.
According to evidence presented at trial, from approximately April 2003-October 2005, Blanford, while working as a senior sales representative for Long Beach Mortgage, a wholesale sub-prime lender and former subsidiary of Washington Mutual Inc., participated in a scheme to defraud his employer. Blanford earned compensation based on the volume of loans processed by Long Beach Mortgage. The evidence established that he paid a loan coordinator in cash and checks to falsify documents, provide false verification of borrowers’ employment or professional licensing status and turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage.
In each of the years 2003, 2004, and 2005, before taxes and payroll deductions, Blanford received more than $1 million in commissions and other compensation from Long Beach Mortgage as a result of his scheme. Between April 2003 and October 2005, he paid the loan coordinator more than $50,000 in checks alone.
“This investigation exposed a sophisticated chain of fraud that started at the homebuyer level and extended all the way to banking insiders," said U.S. Attorney Wagner. "It is a lesson that those earning million-dollar paychecks are not exempt from significant criminal penalties.”
This case was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending; and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations.