Photo: Charlie Engle
It is a topic of neverending frustration.Despite the millions of ridiculous mortgages made during the peak years of the housing bubble, despite the billions of dollars of profits raked in by Wall Street and mortgage firms like Countrywide, despite the ensuing financial crisis that nearly brought the economy to its knees, no one has been held criminally responsible.
With the exception of a couple of mortgage investors on Wall Street, in fact–both of whom were justifiably acquitted–no one has even been charged with crimes.
Well, almost no one.
After an exhaustive investigation that included multiple agents, multiple criminal theories, dumpster diving, disguises, impersonations, and a secret wire, the government has finally nailed one alleged mortgage crook.
His name is Charlie Engle.
He’s an ultra-marathoner.
And a homeowner.
A homeowner who may have overstated his income on a “liar loan.”
Joe Nocera tells Charlie’s story over at the New York Times. It’s quite something.
The government caught onto Charlie Engle when a Federal agent saw him featured in a movie in which Charlie ran across the Sahara Desert (which no one had ever done before).
How could Charlie Engle have afforded to train for a stunt like that, the Federal agent wondered to himself, if he weren’t hiding income and committing tax fraud?
Now, that’s not the first question that would pop into the minds of most people who saw someone run across a desert. And in this case, it wasn’t, in fact, the case.
The agent discovered that Engle wasn’t committing tax fraud when he conducted a full investigation of Engle, including personally going through Engle’s garbage looking for incriminating evidence. But still the agent was suspicious. So he sent a good-looking wired-up female agent to flirt with Engle and get him talking. And in one of his conversations with this agent, the other agent says, Engle said something about speculating in real-estate using liar loans.
It turned out that Engle had used two (2) “stated income” loans to buy two properties.
On one of these loans, he wrote his actual income (no fraud there).
The other loan, which was prepared by Engle’s mortgage broker, included a wildly inflated income number. Engle says he never saw this income number or signed the loan application. A forensic handwriting analysis of Engel’s “signature” and initials on these documents suggests that the signature was likely forged. Engle’s mortgage broker was later arrested and convicted of mortgage fraud. Engle’s mortgage broker later testified against Engle in exchange for a lighter sentence. The mortgage broker said Engle had signed the papers.
Now Charlie Engle’s serving 21 months in Beckley prison for “mortgage fraud.” His mortgage broker is serving 10 months.
(And to be clear: If Engle committed fraud, it’s perfectly reasonable that he be held accountable for it, even if he is a small fry, and even if “everyone was doing it.” The evidence that he committed fraud, however, doesn’t seem particularly strong. And the lengths the government went to to “sting” him certainly seem misplaced, especially given the lack of prosecutions higher up the food chain).
Not surprisingly, Charlie Engle lost the two houses he bought with his stated-income loans. He also lost the equity he had in them. As further punishment for his alleged crime, when he gets out of jail, Engle will have to pay $236,000 of “restitution” to the entity he harmed.
What’s that entity?
You guessed it… Countrywide.
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