SPECIAL TO THE WEB
Annette Simmons-Brown, CFE
It's easy to record a document onto the title of a real property. Typically one needs only to have the proper form of a real estate document — a "conveyance of ownership" instrument, a mortgage document, a lien form, a power of attorney, an affidavit — and the appropriate legal information about the property, access to a notary's approval (or just a notary's stamp or seal) and filing instructions for the county recorder's office (or comparable office in your local jurisdiction). Then, bingo, the document can be filed and recorded with no verification of the truth of the information it asserts. Easy filing — coupled with no need to verify the filing's substance — enable significant, varied and lucrative frauds.
Within six months, the Hennepin County Attorney's Office (HCAO) in Minneapolis, Minnesota, charged two separate defendants with various criminal offenses in which false filings of documents at the county's registrar of titles/county recorder's office played significant roles.
The defendants — both 34-year-old men with professional résumés in real estate and investments — stole hundreds of thousands of dollars by the time they were charged with racketeering and other assorted fraud-related counts. Their routine fraudulent activities highlighted the vulnerabilities of public systems that are entirely dependent on personal honesty. (Neither defendant knew each other, for which we can be grateful.)
In part one of this two-part article, we'll examine the peregrinations of one Trevor "Bam-Bam" Baker — a financial crime generalist and all-around tiresome individual. In part two, we'll examine the specialized antics of Rory Sykes — whom I call the Lizard King of Foreclosure Fraud. Although their schemes were different, their common playground was the county recorder's office, and their respective hauls were substantial.
THE ADVENTURES OF BAM-BAM BAKER
Trevor Baker was a 6'6" bruiser of a self-styled home builder/renovator and all-around real estate whiz in Hennepin County. Before he discovered the fraud potential in real estate, he worked for a national investment house as a sales and executive investment trainee and learned the logistical operations of this and similar companies. He later became a mortgage loan officer and a commissioned notary public in the mid-2000s. His bar buddies gave him the nickname Bam-Bam, for reasons that faileth human understanding, and so that's how investigators and prosecutors later referred to him.
Bam-Bam had eight business entities registered in three states: Lucerne Capital L.P., Lucerne Builders, Lucerne Group, Marketech Investments Inc. (two entities with the same name), Geneva Capital L.L.C., Geneva Trust and Geneva Capital Trust. Remarkably, all of these entities operated out of a post office box the size of a toaster oven at a UPS outlet in a Hennepin County suburb known for its higher median incomes and relative transience. Bam-Bam listed himself variously as the "qualifying person," "general partner," and "director of investments" for these entities.
Bam-Bam also had a mother, Pamela, who had some business integrity "issues"; an honest grandmother, Edith; a soon-to-be ex-wife, Melissa, who had a healthy income and an increasing contempt for Bam-Bam; and a soon-to-be ex-brother-in-law, Dennis, whom Bam-Bam could easily manipulate.
Melissa's contempt for Bam-Bam was well-founded. For although Bam-Bam had all of these wonderful business entities, Melissa never saw him build or renovate anything unless it was a residence in which he lived. He bought, built or renovated these residences by fraudulently obtaining large loans, and he facilitated these loans by regularly filing false documents with the county recorder's office.