Man Pretends To Be Hank Paulson To Make Fake $353,000 Mortgage Payment To Citi, Succeeds

Tyler Durden's picture

Perhaps the most surreal fact about the case of 35 year old Bryan Gardner who back in 2009 sent CitiMortgage a $353,000 money order "drawn on the account of the 'Secretary of the Treasury Hank M. Paulson, Jr." in order to satisfy the final payment for a property in Bowie, Md, is that.... he succeeded. Fox Biz has more: "CitiMortgage erroneously accepted the document and credited Gardner's mortgage account in full," according to a Secret Service affidavit. Within months, Gardner sold the property for $254,900 and then "distributed the proceeds to others," according to public records and the Secret Service affidavit. Investigators believe Gardner may have initially secured the mortgage under false pretenses. Through a spokesman, an FBI agent who investigates mortgage fraud said he was surprised the scheme succeeded, and a former Justice Department official who helped lead fraud enforcement efforts in the wake of the financial meltdown agreed, calling the approval of the money order "bizarre." Perhaps what is more bizarre is just how a plan like this, which a 3 year old could concoct, but not even a 3 year old would be dumb enough to believe it would fly, actually succeeded. Just how big is the pool of "unclaimed" cash on deposit at CitiMortgage is there was i) no actual account was debited for the full amount and ii) nobody noticed that the Treasury department was paying off a private mortgage.

Unfortunately, we are confident that by the time the entire mortgage fraud house of cards is unwound, we will learn of cases in which President Lincoln personally prepaid mortgages closing in 2010. But have no fear: this is only money that will be funded out of the general Treasury ledger, and which you, dear taxpayer, will foot the bill for. Nobody else.

It gets even funnier as our law enforcers realize that merely the tip of the iceberg in mortgage fraud land is beyond ridiculous:

"I've never heard of a case where a mortgage for such a large amount was satisfied with a fraudulent instrument -- an instrument that's so on-its-face fraudulent," said Paul Pelletier, who until a few months ago was a top-ranking official in the Justice Department's Fraud Section. "You'd be amazed at how many people try and pass off (fraudulent) stuff. But does it ever work? No, it rarely works."

 

In fact, Gardner's alleged scheme didn't work the first time he tried. In November 2008, two months before his successful attempt, Gardner sent a nearly identical money order to CitiMortgage, but it was rejected, according to the Secret Service. The only difference the second time around: Gardner requested slightly more money, court documents say.

 

Pelletier said this case is "extraordinarily unusual" not only because CitiMortgage ultimately honored a fraudulent money order, but the company allowed it to be credited to Gardner's mortgage and likely issued a "satisfaction" on the mortgage, as reflected by Gardner's ability to sell the property.

As for Citi, why they have no idea what this means.

A CitiGroup spokesman said he was limited in the details he could offer about the case.

 

"We notify law enforcement authorities about matters of suspected fraud," spokesman Mark Rodgers said. "This case is currently under their purview, so we do not think it appropriate to provide details."

 

A spokeswoman for Paulson said the former treasury secretary was unaware of the case.

 

Pelletier, now with the firm Mintz Levin in Washington, said Gardner seems to have gotten "lucky" for two years, but in such cases, "You're going to get caught eventually."

 

Gardner has now been charged through criminal complaint with one count of mail fraud. A grand jury has yet to indict him.

We feel bad for Citi: perhaps the mortgage agent just thought they were returning a modestly reduced favor:

In November 2008, Paulson and other Bush administration officials agreed to lend CitiGroup $45 billion in taxpayer funds, hoping to stave off an even deeper financial crisis. It was one of the largest bailouts ever in U.S. history. CitiGroup has since repaid its debt to the U.S. government.

Right, by borrowing money from the Treasury to repay other money owed to the Treasury...

As for the brilliant Mr. Gardner...

According to public records in Maryland, Gardner filed for bankruptcy protection in February, and two months later he agreed to surrender his Ford Expedition and Waldorf home. The case has since been closed.

If nothing else, and TARP 2 is certainly not nothing else, the full extent of the fraud, potentially reaching well into the trillions, will provide for countless hours of late night and blogging humor. We can't wait.

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Sow-puncher's picture

Haha:) Thank you. I am a bit bored today, so I thought I will try something different. Greetz

minosgal's picture

Bryan Gardner amuses me. I would have his children.

Screwball's picture

Too bad his name wasn't Linda Green.

SwingForce's picture

You idiots have no idea how preposterous this is. This was a brilliant plan. Honk, well, ask Christine.

High Plains Drifter's picture

how is this fraudulent?  he offered and then they accepted. he did not sign paulson's name to anything. but merely made up a draft drawn on paulson's account. this is not fraud. they just screwed up. i would have taken off with the money and disappeared.........

EvlTheCat's picture

iii) Maybe it wasn't the first time a money order was "drawn on the account of the 'Secretary of the Treasury Hank M. Paulson, Jr." in order to satisfy the final payment for a private property?

Man those prostitutes got it made!

High Plains Drifter's picture

the top google search item

 

is rick perry gay?  

ha ha ha ha ha ha

ha

http://saintpetersblog.com/2011/08/is-rick-perry-gay-googlers-want-to-kn...

notRobot's picture

OT, but banking advice sought nonetheless: Should I sell my 241k mcmansion for 170k (current offer) to pay off 130k in home equity line at BAC and then go rent? Or should i keep paying 7k property tax + 2k insurance and stay put rent free (home was purchased with cash)?

I'm wondering if it's good to be holding mcmansion real estate through the next 10 years, or better to stay nimble and ready to leave town when SHTF.  

I know this ain't no personal finance advice page (we can just fight if that's better), but I'm eager for your thoughts.

If the banks are so sloppy, can i walk away from the BAC home equity loan (currently paying only 2.75%)?

Or can i use the remaining home equity to take out a second mortgage--to buy more metal of course?

Do banks give 2nd mortgages these days?

Ich bin ein Hank Paulson.

Atomizer's picture

Interesting story to deter flock from the real story. See below. Guess who is funneling money? LOL

US Feds Aided Mexican Drug Cartel

 

Eric Clapton- Cocaine

http://www.youtube.com/watch?v=Q3L4spg8vyo&feature=related

 

 

DosZap's picture

TD,
This is HILARIOUS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Funnier YET< is I wonder how MANY More this slickster did the SAME thing to, and collected.............
Hahahahahahahaha..........................

 

Hey, Hank!!!!........................SUCK ON THIS..........................................of course WE ARE paying for it, but hell, what's another $400k?????.

I WOULD HOPE, the Bank had to eat it.

walküre's picture

Best find yet on ZH. Thanks.

iinthesky's picture

it wasnt a check. They said a money order.. clue number one. If TD or anyone can get their hands on a copy of this instrument that would settle it. Technically, he did what the banks do every day but he did it right. I imagine they will seal the case after its done so noone can see the evidence. Sounds too familiar to be a random fraud. I think the so called patriot myths are going to turn out to be spot on much like the accurate information that people who have no fuckiing brains like to call conspiracy theory has in again and again..

Downtoolong's picture

Within months, Gardner sold the property for $254,900 and then "distributed the proceeds to others,"

So, who now owns the home? Could this become one of those once in a generation events where a title company is actually on the hook to pay out a smidgeon of the excessive fees they charge to home buyers? In any case, this will likely turn out to be another fine example of a big bank’s bumbling and fumbling turning the life of an innocent bystander (the new home buyer) into a living hell for at least a few years.

CitiCorp Clerk A:  Hey Freddie, do you think this settlement check is any good?

CitiCorp Clerk B:  It’s fine Fannie, just throw it on the pile with the rest of the mortgage crap we’re selling to the Fed tomorrow.

 

Tunga's picture

"It's ok, we do this all the time." - The well dressed man in Amsterdam. 

Schwantz's picture

Find the info about the richest 1% and carry out fraud in their name.  It's obviously not a crime.  If you get caught, claim self-defense and demand a jury.

indio007's picture

you ain't seen nothin' yet.

 

Check out US v Wahler. Curiously sealed the judge and jury notes after acquittal. 32 not guilties on a closed checking account. It is only monpoly money after all. Does it really matter who prints the fiat? It's not like any of you have ever redeemed a Federal Reserve Note for lawful money

Acquittal

http://www.americansrepublicparty.org/attachments/File/fedcase/Exhibit_2...

 

Docket

http://www.myprivateaudio.com/030110_wahler_docket.pdf

 

 

Frederic Bastiat's picture

At RBS, we don't know if we weren't paid a corporate bond distribution until the counterparty calls to tell us.  Not surprised.