True Confessions of a Closer
A personal account of one closer's demise caused by making the wrong choices in her career. This story ends with an encouraging message from the former closer to all settlement agents about ethics, the loss of freedom and consequences.
It was 8 a.m. and I was sitting in my office, well on my way to conquering the day. A noise came from the front office and I heard the door open. I walked out and gave my enthusiastic morning greeting to the two gentlemen waiting there, but it was not reciprocated. The two gentlemen asked, "Are you Jill?"
"Yes I am," I replied.
"We are with the FBI and we need to talk," the two gentlemen said.
A second later the three of us were in the conference room and numerous copies of some of my best fraudulent work were placed in front of me. "You are a very lucky person, Jill. You are being given the opportunity to cooperate fully with us at this time and maybe you can be fortunate enough to receive only probation or a year in prison – no guarantees. You can go to prison for five years for each one of these offenses. We could have just come to your home and arrested you. You need to make your decision right now," the two FBI agents said. I was so scared. Thank goodness I had the ability to say, "I will cooperate."
Now, let us go back to the beginning. For many years I worked for a different title company and put everything I needed in place so I could have a title company to truly call my own. It required a lot of diligence, hard work and intelligence. Now, "intelligent" is an odd word to describe me when you reflect back. I have been in real estate in some capacity for the past 18 years. I did not have enough common sense to see that everything I did in this industry was easily tracked by a paper trail. Any person in any realm of real estate can say anything they like, but cannot deny what a paper trail clearly shows.
During the past three years I completed about 60 deals that allowed buyers to receive cash back. That is not an issue if a lender approves the deal, but if the lender doesn't approve, it is indeed an issue – an issue that could possibly result with a closer in prison. How it came to be was innocent enough. A valuable loan officer client came to me and asked if I had the ability to make a deal work so a buyer could get some funds back. Very foolishly, I told him it was possible. It was the worst thing I could have ever started for myself, that loan officer or the real estate industry. My actions created an assumption that I would close those types of deals in the future.
It was quite easy to justify my actions in my head when I felt the bases were covered. The buyer was fully aware of the transaction details, the seller knows, the REALTOR® knows, the loan officer knows, etc. Oh wait … that's right, THE LENDER DOES NOT KNOW. Funny how that little detail can just jump past the logical part of a brain?
Now let's make the rules completely clear for those of you working in real estate:
- The lender must be made aware if a buyer is going to receive money back on a purchase.
- It is also unadvisable and unethical to put a bogus lien on a property so the seller pays it off at closing on a lender-approved settlement statement, thus sending those funds back to the buyer.
- The lender must know if a seller writes the buyer a check after closing for any sort of allowance or credit.
- New ways to go around the system are not alright or advisable. Remember, everything has a paper trail!
Closers must maintain a professional and ethical business attitude, after all, who wants to spend the rest of their life as a convicted felon?
People are driven by a desire to have quality of life, family and friends. That is part of the very reason that so many are in the real estate industry in the first place. Owning a home is a key to most people's financial and personal stability.
It was very tough when I found myself in this situation with the FBI. I could not tell anybody what had happened, or my cooperation agreement would be broken immediately and I'd be prosecuted to the full extent of the law. I could only talk to my husband and the FBI. The FBI asked me questions about loan officers, realtors, buyers, sellers and others with whom I routinely conducted business. I considered many of these people to be my friends and I really cared about them, which made the questioning very tough to undergo.
I became suspicious of everything. Every time I received a phone call with a question, or a call from someone I did not know, I was paranoid. I constantly asked myself, "Am I being tested, taped or set up?" I cannot mention all the things I have had to do for the FBI, but it opened up ideas in my overactive imagination that could be put into a spy novel.
"Jill, we need to charge you now to go forward with the rest of our cases. You need to find a really good criminal defense attorney that specializes in money laundering and wire fraud," the FBI told me. Until I heard the aforementioned statement there was still a glimmer of hope in me that they were yanking my chain a little bit to get the most information they could. I have heard of wire fraud and money laundering before but had no idea that what I had done even fell under those categories.
Less than two weeks later I was in front of a federal judge pleading guilty to money laundering and wire fraud. My troubles went from being a personal issue to public knowledge.
I am pleading with those reading this issue of Fraud Insights to learn from my story and not make the same mistakes I have made. If you have made these mistakes or mistakes like these in the past – stop! It is that simple. In my collective real estate career, the erroneous deals I have made did not make me rich or give me anything of value in my life. The only thing those deals gave me was a permanent stigma – I will now forever be defined as a felon, which will impact every facet of my life.
The next three months to one year of my life will be spent waiting for the telephone call to let me know it is time for my sentencing. If I have to go to prison, I will only get about one month to say goodbye to the people I love so much. There is a possibility I will miss some of the most special moments of my only child's life. Those moments will be lived through pictures and stories from my husband.
I also cannot do mortgage closings, had my real estate license revoked and will have to disclose my criminal history every time I apply for a job. This is why I am urging you to make the right and smart decisions in your day-to-day operations. Choose ethics and freedom over a life dictated for you.