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A Novel Way To Rehabilitate Convicts

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By CARL HIAASEN McClatchy Newspapers

The Tampa Tribune

Published: July 31, 2008

The revelation that more than 10,000 convicted criminals have been welcomed with open arms into Florida's mortgage industry is shocking, even in light of the state's sleazy, anything-goes history.

At first blush, things look bad for the Office of Financial Regulation and its commissioner, Don Saxon, whose long nap was harshly interrupted by last week's headlines.

And although it's tempting to view this story as just another embarrassing validation of Florida's reputation as the most crooked and most screwed-up place in America, there might be an upside to the scandal.

Granted, a Miami Herald investigation revealed that just about any scumbag with an arm's-length rap sheet can get work as a mortgage broker or so-called loan originator.

From 2000 to 2007, the OFR allowed at least 10,529 persons with criminal records to begin arranging and selling Florida mortgages. Of that motley throng, 4,065 somehow cleared background checks even though most had previously committed serious crimes - including bank robbery, racketeering, extortion and fraud - that by law should have kept them out of the mortgage business.

Other crimes of "moral turpitude" found on the records of newly approved mortgage peddlers: assaults, dope deals, sex offenses and at least 15 homicides.

As it turned out, some of those felons failed to become model citizens upon entering Florida's then-booming real estate market. They went on to commit at least $85 million in mortgage frauds, fleecing both lenders and borrowers, according to the newspaper's findings.

Some people might look at such alarming facts and see a colossal failure by regulators to protect home buyers from known scammers and thieves. No wonder Florida has the highest rate of mortgage fraud in the country, you might say.

But let's look at it another way - not as horrendous bureaucratic incompetence, but rather as a daring, innovative way of diverting and retraining Florida's inexhaustible supply of felons.

Take Donald Lewis Smith, for example. In 2003 he was licensed to sell mortgages in Kissimmee despite lying about his criminal record - a 17-year sentence for strangling his wife and dumping her body into Tampa Bay.

It should be noted, however, that in five years as a broker, Smith hasn't murdered a single customer.

Then there's Scott Almeida, who forthrightly informed mortgage regulators about his federal drug trafficking conviction. In 1998 he'd been busted with two kilos of coke, two assault rifles, a stolen pistol and a drug-packaging device.

Not long after Almeida got out of prison, the state gave him a broker's license and told him to behave. He promptly went out and racked up $3 million in fraudulent loads, choosing as his victims disabled and elderly persons.

What Almeida did was truly rotten but, on the bright side, at least he gave up the cocaine trade.

See, after you live in Florida long enough, you learn to look philosophically for the silver lining in every storm cloud.

Maybe Saxon's been asleep at the switch, or maybe he was simply trying to keep known criminals off the streets by putting them behind desks instead. Isn't it better to be robbed over the phone than at gunpoint?

Carl Hiaasen is a columnist for the Miami Herald.

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