Sure Jay, you don't have sympathy for the guy, but there is some bigger and much more insidious going on here. Don't you want to look at this from a big picture perspective?

I'm generally with JayEll here - hard to have sympathy for the guy who was cheating the system so he could do what he wanted. I'd love to go spend 6 months walking across Europe, but I'd have to leave my family to starve or commit fraud. Most of us generally avoid fraud because we know it is wrong. He knew what he was doing was wrong too - thus the no sympathy part either.

I'm assuming your reference to insidious goings on was intended to imply that some heads should have rolled at the actual lending institutions - and probably so, but as stated in the article it is really hard to prove guilt in the instances of large companies (who specifically is guilty and/or who knew what) vs. the smaller players in this particular instance (who actually ended up pleading out and testifying). He went for the jury trial and got a longer sentence. That happens when you are guilty.

While I don't condone what this guy did, really, 700 hours to investigate this, almost 90 full working days, wire tapping, undercover agent, court time, prosecutors, cost of imprisonment?

There has to be more to this story. If not, I would only hope our government is that aggressive at catching violent criminals.

WoW! You must have missed your internet stop at the KKK stop, cowboy!! What a total bigoted, moronic, idiotic, ignorant person you are AZCowBoy. Sooooo brave to make anti-semitic, hate-filled comments using an avatar! Are you an escapee in the time warp from Nazi Germany around 1943??? I do sincerely hope this site blocks you from ever posting your filth here again. Next time you want to rant use your real name (and address and phone number) so we can personally congratulate you on your phenominal level of ignorance.

Yes, I don't see why people are saying that the banks are the bad guys in this situation. There are plenty of people that lie about their income to banks and brokers are complicit.

Though they should do more, bank lenders can only do so much in assuring that every document is not fraudulent.

Arizona. Of course.

Liar loans were considered "good business" at Washington Mutual, and that's well documented. Were there any prosecutions of the WaMu executives who knowingly encouraged - even demanded that practice? None that I know of. Kerry Killinger (WaMu CEO) should have been prosecuted.

No sympathy for this guy at all. And to the writer of this article, you cannot compare what this guy did to the no income verification loans banks were making. If he wanted a no income verified loan, I'm sure he could have recieved one. However, the banks that offered those loans typically priced the mortgage differently than a full doc loan. Most no income verified loans were charged higher origination fees, discount points, and interest rates to offset the risk to the bank. What this guy did was lie about his income, with the help fo the broker to get a better deal than what he would have got otherwise. Also, even with no docs loans, a large portion of lenders would not grant no doc loans on investment properties or multiple loans to the same borrower.

Did he pay his mortgages? Did he default on them? Was he ever late on any of his mortgages? If not than there is no fraud since the bank and lenders are obligated to the same due diligence as anyone else. As long as he paid his loans back, there should be no issue!

Also, what business did this IRS Special agent have in watching a guy talk on a TV shoew and decide for himself without any eveidence of wrongdoing go open an investigation that wasted 700 hours of time the was paid by us taxpayers.

THAT IS THE FRAUD! The IRS agent should be prosecuted and fired since it turned out that there was no Tax Fraud going on and that his cavalier attitude that he has the power to just dig into someone without any indication that something was wrong. Maybe this runner guy was a trust fund guy or maybe he planned his life well and had annuities.

I do not have sympathy for Engle either but you have to look at the big picture also. I trust my kids but I also do not want a drug dealer tempting them into anything either. Ending crime starts with removing temptation except in the US where it seams being a drug dealer is OK not a drug user.

People clearly don't understand how those no-income docs work. Banks offered them to just about anybody with a job. Banks were on a money-making scheme and were involved in all kinds of shady practices to make that money. Not just the banks either--the realtor, the appraiser who inflated the value of your house--everybody took some money off your transaction and left you holding the bag. Then when you get mad about it, the banks convince you that it was all your fault and you swallow their line again like a dumb fish.

The bankers however, since exposed and indicted for a variety of mortgage related & financial crimes against humanity, get bailouts and the option to settle. All homeowners, however, are stuck with homes dropped in value, lost jobs, and underpaid as a result of these shenanigans.

It's the job of the mortgage broker to verify everything on the paper. He should have had the longer sentence.

AZCowboy (comment #1.4)--You need to go read what Saint Paul's letter to the Romans--chapter 11, says our attitude should be regarding Jewish people! It starts out "Is God therefore through with the Jews? May it never be, for I myself am a Jew of the tribe of Benjamin." The chapter gives God's take on the Jews, and what our attitude as Christians needs to be toward them. We are to love them! In fact, in other parts of the New Testament, we are given the prime directive to love all those whom Jesus loves--which is every single human on the face of the earth. I am saying this to you, just in case you claim to be a Christian. If you are not a Christian, then the New Testament probably is not part of your decision-making. Even if you are not a Christian, you might want to try reading the New Testament--there are some really powerful statements in there about love.

Bart Conner

It's the job of the mortgage broker to verify everything on the paper. He should have had the longer sentence.

It is the job of every AMERICAN to not lie. cheat, steal and flat out SCAM for a home.

If you CANNOT AFFORD THE HOME.....then do not buy it...period. Having a job and nothing else does NOT mean you can afford a home. In this case the guy did not even have a job.

It is not the RICH or WALL STREET screwing you...it is your own stupidity for BORROWING in the first place...PERIOD.

It is all a con game. Why does Uncle Sam want higher home prices? Is it wrong if people can actually save to buy a home cash down? Why do they allow mortgage interest deduction from tax? Was housing bubble intentional? Was sub-prime intentional? Google for "WEB OF DEBT KONDRATIEFF WAVE" to understand the modern day slavery imposed upon developed nations.

AZ Cowboy would only say such a thing while he can hide behind his computer in his mom's basement like the coward he is.

t is the job of every AMERICAN to not lie. cheat, steal and flat out SCAM for a home.

Well aren't Bankers and Corporations Americans, too? How come Wall St gets to lie, cheat, and steal and flat out Scam American workers? Or are they saintly angels in this mess? How come they weren't prosecuted for selling my pension fund gold-plated Mortgage Backed Securities that turned out to be a bunch of dust?

The Bankers have always been in control. They don't have to give money to anybody they don't want to.

The next explosion of fraud is going to be tax evasion, especially among younger generations.

I don't have any sympathy for the guy. He essentially lied about his income so that he could live in a nice house and go running every day. More than a million dollars in four mortgage loans. That is fraud.

My reading comprehension may be poor, so I might have missed it, but did he default on any of the loans he was given?

I think the real issue here is that the Government was looking for was tax fraud, but when they couldn't get him on that, they just got him on whatever they could find.

He should have really just gotten a slap on the wrist for lying to the mortgage companies if he was making all his payments on time. Instead, he got slapped with almost 2 years in jail and they got to keep the houses and the money he payed them for the houses.

It seems to me that the mortgage companies aren't the victims here, they may have benefited from him going to jail for mortgage fraud.

I applied for a mortgage about that time and it didn't matter what you wrote down as your income, the broker, or someone, would change it to whatever was necessary for the loan to go through.

tFt Laudedale......AGREED! He - the agent sounds like a self appointed prick!

FrisbyDog,

It doesn't work that way.

A friend of mine was nailed for speeding. His excuse was, "But everyone around me was speeding, officer!"

The police officer's response? "Well...I caught you."

This guy took in a million dollars in ill-gotten loans. The fact that there are bigger crooks on Wall Street who got lighter sentences--or no sentences--might be wrong, but it's also irrelevant. Mr. Engle broke the law, and he paid the price.

If you're proposing that those bigger crooks should garner the same scrutiny that this lone taxpayer did, I agree with you. It would seem to me that bigger fish managed to escape the net.

But I don't have any sympathy for Charlie Engle, either.

Let's not forget the obvious, the reason others, the big boys, aren't going to jail is because they have enough common sense to not tell a total stranger they committed crimes.

This guy has no one to blame but himself, he committed a crime and then kinda bragged about it. And his defense seems to be, I'm not the only one. While true, it's not a defense and I would add not everyone else admitted their crimes to a stranger.

I would like to know how everyone manages to get these loans. I bought a house during this same time period. I was earning a very good income, had investments that totaled two or three times the value of the house, decent credit, etc., but had a heck of a time getting a loan. So why were people like this liar able to easily get loans for tens of thousands of dollars more than they earned or were worth?

Oh, that right...I'm a divorced woman! No loan for you, deary.

Engle spent a year and half in prison for his role in the financial crisis. But he didn’t work on Wall Street and he was not a banker.

Shucks, he should have worked on "Pig Street" that way the DOJ, nor any courts, would not have touched him.

Do a quick check on how many "Pig Street" financial institution "mortgage securities fraud" folks have been charged with ANYTHING. Once again, the "bail out Kings" go Scott free.

KeenInsight

People clearly don't understand how those no-income docs work. Banks offered them to just about anybody with a job. Banks were on a money-making scheme and were involved in all kinds of shady practices to make that money.

The money was made in originating the loans and collecting the fees. The loans themselves didn't stay with the originating banks anyway, they went to secondary loan-servicing outfits who made their cut servicing and collecting. The loans were sold, resold, bundled as securities, and every transaction made more bucks for the paper pushers. Those much-sold bundled loans - collateralized debt obligations - were at the center of the meltdown.

Probable cause for Robert Nordlander was that the man trained for extreme sports. Robert Nordlander also is quoted in another article that he will investigate someone if they drive a Ferrari to see if the driver can afford it.

Robert Nordlander doesn't have the balls to investigate the real Wall Street criminals in this country, so he goes around sniffing the asses of people who live lives that make him jealous, just to see if they are committing a crime. The only probable cause is that the person appears to live a nice life. He had no other reason to investigate Engle.

Robert Nordlander belongs in a jackbooted police state, not the United States of America. Of course, now he probably will conduct a sting on me for exercising free speech.

Bottom line, the borrower was wrong. To say nothing should have happened to him, that he should not have been held accountable, is to outright condone fraud, basically saying he was not at fault and should not be prosecuted. We can point out other parties who might also be guilty of things, but how is that at all relevant to the borrower's guilt? It makes as much sense as two kids who steal from the cookie jar, but one says, "I only took one, he took three," and actually lacking the common sense to recognize that both were guilty, deeming one innocent. That's total nonsensical BS. C'mon, use a little intelligent and rational thinking sometime.

Why did this IRS agent even get involved ? There was no evidence, or probable cause Mr. Engle was delinquent on his taxes or anyone had been defrauded out of money. If Mr. Engle was making his required payments at the time, nobody had been defrauded out of a dime...

This case should be overturned on the basis there were not victims at the time of arrest.......I know a man who claims to have been abducted by aliens, but he has never been sent to jail........Put the agent in jail for going on a witch hunt without probable cause......This is law enforcement at it's worst.....

I like to see some bank CEO serve time for what they did, too bad our fed does not have the bal.s to go after them.

It doesn't say if he defaulted on the loans, unless I missed it. If he didn't the sting operation against him and all the hours to convict him are nothing but a witch hunt by one overzealous agent. If he hadn't been in the public eye, raising money for water projects in Africa, nobody would have known.

Moral of the story: stay anonymous, don't do anything special, stay in the shadows where nobody cares about you.

Heckuva country we're creating here folks. Big Brother would be proud but I'm embarassed to be part of it.

While many big banks were chastised for risky behavior in lending by Congress, they got bailouts worth billions. Charlie Engle, meanwhile, was the target of a federal case involving an undercover operative, a dogged IRS agent and conspiring mortgage lenders

____________________________________________________________

This is disgusting,,,,,

,,,,,, Lets get something straight here;

Our pathetic Justice Department was handed , on a silver platter , all of the evidence necessary to PROSECUTE some of the largest names on Wall Street for their crimes in the financial collapse. THEY CHOSE TO DO NOTHING !!!!

It is called "too big to prosecute" in this land built on the LIE that: "No man is above the law".

These same justice Department scum will prosecute Wesley Snipes, Charlie Engle, or Martha Stewart to drive fear in to the taxpayers, BUT THEY ARE TOO CORRUPT TO PROSECUTE LEHMAN BROTHERS, JP MORGAN, OR ANY NUMBER OF THE REAL CRIMINALS WHO INFEST OUR SYSTEM.

Just how much more STUPID & CORRUPT can the United States Of America become before the entire mess collapses ?????????

.

DISGUSTING !!!!!!

.

A few have asked why this guy was targeted. It mentions it in the article. He was immersed in running and allowed it to be broadcast (even a documentary made). “The run across the Sahara ended up being a little over 4,600 miles,” Engle said. “We basically ran about 50 miles per day, every single day, for 111 consecutive days without taking a single day off.” Suspicion of his income was raised. If he was able to prove the income he claimed, you would not have heard anything about this. Who is to say authorities have not done this to others, just that some could prove their income, or were guilty but the story did not make news?

So the tax guy that was so obsessed, never found any tax fraud but spent 700 hours (over four months) of work and untold resources to get this guy but no tax revenues were gained. What are we paying IRS agents for?

Same reason why we spend a policeman's wages so he can come out for the theft of something that is worth much less than the wages to cover his time. In nearly every minor robbery, if you did a direct cost benefit analysis of all the costs involved, it would come out negative. But can you imagine if whether or not a crime gets investigated is decided based on a cost analysis of police and investigator's wages (and any allocated overhead), defense attorney costs, judge salaries? It's irrelevant to the purpose of justice. It has to do with social control, avoiding negative reinforcement. When you condone fraud, the long term costs are huge.

Syn Holliday, yes he ran for 111 days without a day off. Why is that suspicious? Why should that prompt a government intrusion into his life? Running for 111 days is not a crime, nor is it probable cause for investigating ANYTHING. It is simply government overstepping its bounds.

Now, if the mortgage fraud had triggered the investigation, that would have been a much different story.

Two wrongs don't make a right, but I understand that the bankers still got their bonuses, aren't I right?

But what was this man doing with his time? Going across the Sahara raising money for clean water? Representing America in a good light? Slap him for the fraud, but then employ him as an Ambassador. I hear that there is a vacancy.

It really bothers me that a IRS agent can just watch a tv show and go "hmmmm I wonder where he makes money" and then launch a huge investigation into you with zero evidence of wrong doing. He must have spent a million taxpayer dollars on his day dreaming.

Yes he broke the law but you seem to be missing the bigger picture. This fraud went all the way to the top management in these too big to fail banks yet all prosecution seems to stop when it gets to that level or they are allowed to buy their "get out of jail free card" with bail out money, all the while "admitting no wrong doing". LOL

PRE-ECONOMIC CRASH

banks found it "too troublesome" to verify employment status and income.

POST-ECONOMIC CRASH

suddenly it's not so challenging anymore

Bought my house in 2009 - they absolutely verified our income, checked our savings and checking account and ran our credit several times to ensure we didnt take on more debt after they ran it the initial time.

Turns out, banks CAN do the DUE DILIGENCE.

They just chose not to, en masse...and you have to wonder how on earth that could possibly be.

Of course, I recall my lender/broker saying "yeah, things are a lot more involved now...not as easy to get a loan"

YOU THINK? thats exactly how it always should have been...

give qualifying people loans, but dont qualify people JUST TO MAKE LOANS.

and no, the govt didnt hold guns to banks heads forcing them to make bad loans - they were forcing them to make loans to qualified people, in area's that banks just refused to make loans (namely low income area's)...there's a HUGE DIFFERENCE between loaning someone who's qualified in a bad area, and loaning to someone who isnt qualified ANY AMOUNT they want.

if you dont know the difference, you're an absolute IDIOT.

good thing we're frying the small fish...remember how they held brokers at gunpoint and forced them to make bad loans?

nope. me either.

There are lots of people who win prizes on TV that are never prosecuted, so this was something that the agent was told to do. The run happened in 2008; this was something that G.W. Bush's friends told the IRS agent to do. I'm not saying that this man didn't deserve prosecution, but that he somehow was picked out for prosecution by his good deeds. And what corporation would have supported those good deeds by granting the money so that he wouldn't have had to take out loans to try to cover his trip?

Its always someone opening their big mouth that gets them in trouble.

Martha Stuart went to jail not for her securities trades (they were perfectly legal) but because she lied about them.

Without his big mouth, the investigator had no evidence giving a reason to look at his mortgage applications. No evidence = no conviction. That's why 99.999% of the fraud which led to the meltdown will never be prosecuted. The bankers did the fraud and the Bush Administration never collected evidence.

Unless this guy let the houses fall into foreclosure, he deserved nothing more than probation. That he was actually sent to jail for this is amazingly ridiculous!

I'm equally disgusted by the IRS agent. This guy owned rental property as his source of income. That should have been the end of this story. I know a guy who was laid off,, so he gave up his apartment, put his stuff in storage and decided to hike the Pacific Crest Trail for 6 months before looking for another job. Sometimes life's circumstances allow you to do something and you take advantage.

Morton - Many innocent and legal things can lead to suspicion. Burning sweet basil from your spice rack with a cop at your door (it smell just like pot). Smell of rotting flesh in your trunk (it might just be forgotten raw meat from the grocery). Running out of a jewelry store right after the clerk discovers an expensive item is missing (maybe you just realized you were late to pick up your kid from school). None of those things are illegal, but they can lead to investigation, innocent as they are. When serial killer Richard Ramirez was loose, I remember a news report about the police detaining a kid getting off a public bus who looked like the police sketch. The authorities questioned him, checked the shoe box he was carrying, and let him go. Was it illegal to look like somone else who committed a crime? Of course not.

There's supposed to be no search and seizure without just cause. Why is this investigation not illegal? There should be no investigation without just cause.

He sounds like the person pulled over for speeding and says, "Why did you pull me over? Others were going faster than me!"

No denial of speeding, just upset he's the one pulled over. He knowingly commited fraud where others obeyed the law and didn't go over their heads. Would his defenders on this post feel the same way if he went belly up and the taxpayers paid the bill.

As with illegal aliens, what part of illegal don't you understand?

My guess is the IRS agent was jealous that he couldn't run as long as the athlete. He might have a screw lose.

If someone can't get a credit card and decides to steal mine; it is a crime.Even if they pay it off in full and on time; it is stealing,fraud,identity theft,etc.

No doubt the guy committed a crime, and many feel the mortgage lenders are wrong also and should be held accountable (though unrelated to whether the guy committed fraud, he did, he admitted it and is guilty). The issue seems to be whether there was just cause for investigating him. I say there was definitely just cause for the IRS to audit him (the IRS has authority to audit anyone for any red flag they determine). As for investigating him (digging through his trash, sending in undercover), I don't know what authorities IRS special agents are given. Are they responsible for following up on criminal behavior even if the investigation doesn't turn out to be tax-related (in this case, mortgage fraud)?

I felt about the same way when Martha Stewart did her time; sure they deserved the time, but then how about the big bankers who still foreclose on properties when the bank makes mistakes.

This man, meanwhile, was prosecuted for the crime of raising money for helping people in the Sahara. There has to be a lot more to this story: was there some other "interest" that didn't want either clean water or help for those people? Did somebody want those nations to look bad, so that they could start a campaign for the "Arab Spring?" I'm a Democrat, but this really bites.

I like how what caused them to look a bit closer was that he was going for a jog in the Sahara and not back in the States working a job. Hmm, a 99%-er not slaving at a daily job and working paycheck-to-paycheck like he is expected to ... better look into it to see what is going on wrong here...

Even then, corporations will not be people.

Now show me one that can take a bullet for a buddy, or throw itself on a grenade to protect it's fellows.

I will believe corporations are people whan Texas executes one.

I'll believe corporations are people when Texas executes one.

As I read the article, it would appear the mortgage broker plead out while Mr. Engle took his chances with a jury trial, hence the difference in sentences. Do not let yourselves be swayed by the "little guy and Goliath" angle of this story. He committed fraud, and he knew what he was doing.

While I agree that the bankers involved should have been punished more harshly and the resources spent on this investigation were overboard, I can understand the sentencing discrepancy.

The others involved in the case pleaded guilty, Mr. Engle went to trial. IF you are found guilty the sentence after a trial is almost always more harsh than if you plead guilty and avoid a trial. THAT is why his sentence was greater than the others in the case...It s essentially a punishment for maintaining your innocence if you are, indeed, guilty.

Do corporations have the right to bear arms?

I'm sure that IRS agent felt darn proud for uncovering a liar loan fraud. Too bad he didn't spend his time and resources targeting the bankers and helping to expose bank fraud. Funny he didn't ask himself the question why would a bank give a mortgage to someone & not even run a free credit check? Or why do banks manipulate accounts so as to encourage overdrafts? Or why do appraisers inflate house values so that borrowers are forced to borrow more money?

Why not comb through the records of some bankers and send mata hari's in to set them up?

I thought we get to pick and choose which laws we follow in this country now? This guy just wanted a better life for himself and his family.

Typical Federal agent Sherlock Holmes/Matlock/CSI wannabe. Guys like that don't give a rat's ass about destroying someone's life over a fairly mild white collar crime. Guilty?

Probably...but to get 2 years for mistating his income?

Either this guy had the world's worst defense attorney, or there's more to the story. Doesn't say if he was in default on his mortgages. And even if he was, why would an IRS agent care without an indication of wrongdoing regarding his tax returns? He saw this guy on a TV show?? WTF??

700 hours + wiretaps????

Are you kidding me?

That's hundreds of thousands of dollars in time that could be better spent on much more heinous crimes with a greater return for the US taxpayer.

Why isn't this IRS agent being reprimanded for wasting an extraordinary amount of $$$$ for such little return?

What a joke.

I think the bigger point here is all the wasted tax dollars to investigate this. 700 hours, wow! How much did that cost us? I would say definitely over $20,000 considering how many people and resources were involved. Add that to the jail time. How much does it cost to keep a person in prison for 21 months? The article does not state that he was behind on his payments, so I going to assume that he was paying them on time. So now we have a man convicted of felony who will have a hard time finding work (and paying taxes), and who probably lost all of his properties due to the prison time. Was all of this a good investment on the side of our government? Is it worth it for us to pay for this man's crime that (seemingly) did not hurt anyone? I don't know about you, but I'd rather see those resources put toward catching murders, rapists, and pedophiles.

While I do not excuse white collar crime as trivial, the behavior of the IRS agent is far more troublesome. Upon finding no tax fraud, this case should have been dropped. The agent should have been suspended or demoted for initiating an unfounded investigation based on his own curiosity.

Engle was and still is a fool for running his mouth to a complete stranger. Anyone showing up at your door unannounced is suspect. While he got what he deserved for admitting to fraud, the agent should not have gotten away so easily...

I think the IRS agent was right to wonder how this man was doing all that running and earning a living at the same time. It makes you think unreported income, and unreported income makes you think illegal activity.

The article does not state what the man did for a living, if anything, or whether he was found to be engaged in illegal activity. It also doesn't say anything about whether IRS went after him for anything. So we just don't know. What we DO know is that he committed mortgage fraud and went to jail for it.

Mrs. Parker'

"he committed fraud against who ?" There was no mention of anybody being out one single penny at the time of Mr. Engle's arrest.....If he did default on his loans it is the justice departments fault for putting him in jail where he could not raise money from more documentaries about his adventures......Have you ever lied ?

JayELL, we do not know he committed mortgage fraud because there is no mention of anyone losing money because he lied. At the worst Mr. Elgle is guilty of giving false testimony, a class 3 misdemeanor.

AleChild, 3.2 I had a good laugh; Texas will never execute a rich corporation, or corporate executive, even if they are serial killers that kill a number of people with contaminated food or drugs.

Sam 3.6: I would say don't give them any ideas, or the Supreme Court, but corporations already have the right to bear arms, and employ security guards that are armed. Also, many employ off-duty police. Some of the Wall Street business employ many police to keep demonstrators away; some conflict of interest led to some beatings a year ago, according to the news.

Jay 3.12: It occurs to me: when do any IRS agents show up at the door of Olympic hopefuls and ask them if they are committing fraud to be able to have the time to train?

This guy's quest to raise funds for clean water in the Sahara, and the fact that he is not one of the official pretty boy afweets, means that somebody thought he should come under the microscope. What corporation would GRANT the funds to help the Sahara? Not the State Department under G.W. Bush or Obama, not the major corporations, not Middle Eastern countries (the rich ones that funded the Arab Spring). And maybe there was also a political reason why some countries wanted him to fail: what advantage would be gained if the poor residents of the Sahara would only be grateful to one group and not America? The agent, watching TV or not, would not be allowed to just go after anybody; this had to be an approved witch hunt to try to stop help from going to the Sahara. I want to know why.

He got bullied by the justice system which like an animal of prey takes on the easy targets. And that's why people don't like this story of injustice for the littler folks.

Welcome to America, same as in Europe, the land of the free, the brave, blah blah blah.......where the end consumer usually gets the shaft.

Of course the Justice system is having lunch with the banks, after a game of tennis next Sunday.

I'm sure he was not current on his loans, otherwise, the banks would not have sought to prosecute him for fraud as there was no loss to the bank. Mortgage fraud is extremely difficult to prosecute because the bank has to show a clear intent to defraud the lender by the borrower and not a simple error that was not caught by the underwriter. I use to work for a lender and had a borrower take out a second mortgage on his home. He needed his wife's income to qualify for the loan. Turns out that the woman he brought with him to closing was not his wife, but his girlfriend who had a fake ID in his wife's name. This was clear fraud. However, when cronfronted by myself and my manager he immediately found a way to payoff the loan. The company where I worked had no financial loss and we were told by the FBI when we tried to prosecute him that they would not because we had no financial loss.

Somehow I think the whole thing seems stupid. The mortgage broker was convicted and went to jail. It is ridiculous to say that the issue was a stated-income loan.

How did he pay his mortgage? What income did he report on this tax returns?

If this was all in order, then the income would have been irrelevant, because he

would have had the income to support the loans.

The bottom line is that he stole other peoples money, by taking loans which he never had an intention to repay.

And what do you base your assumption on? The BANKS didn't prosecute, the AG did. And if he had been in default, the over zealous IRS agent would have known earlier to look at the loans...BTW, that agent's behavior is just CREEPY!!!! Why did he have such a hard on for this guy? I don't buy that he just "happened" to see him on a talk show. This was some kind of vendetta. If we're going to jump to conclusions, I'd say there's more evidence here that the IRS agent used govt resources to pursue a personal agenda...

Strange that little detail was left out of the story. The property he bought was investment property, so the rent clearly covered the mortgage. If the guy was current on his mortgages, then the banks are happy. In any case, a person's income can change drastically over the life of mortgage repayment. The banks, however, don't have a right to foreclose just because your income drops--they do so only if you stop repaying the loan.

Important point.

Like several people have brought up, was he in default on his loans? Nothing in the article or video stated that. The article stated that the IRS agent on his own decided to investigate this person. Sounds to me like he had his own personal agenda.

A couple of key items conveniently left out of this article:

Mr. Engle was ordered to pay $262,500 in restitution to the owner of his mortgages because he defaulted on 2 of his mortgages.

He defrauded the bank with his 'liar loan' that he chose not to pay back even though he had the money to pay.

mcrich,

How do you know the default did not occure because Mr. could not raise money while he was in jail several months waiting for trial? How do you know Mr. Engle's financial problems were not cause because of the over zealous actions of the busy-body agent ?

"The bottom line is that he stole other peoples money, by taking loans which he never had an intention to repay."

How the H do you come up with that from this News Story? Where did it say he defaulted on a single loan? What happens is that after 700 hours of trying to find tax fraud they found nothing so they figured they had to charge him with something to justify the, cost of the crazy agent that apparently had nothing better to do, investigation.

Why didn't the IRS just look at his tax returns and audit him? Instead they wire tap him, snoop through his trash, send in a cute girl with similar interest to sweet talk something out of him (I wonder how far she was willing to go?) All for what? More expense jailing the guy?

It is unbelievable that they went after this guy, but not the ones that perpetuated this culture of dishonesty. I am not saying it was right to lie, but an atmosphere was created by the industry that winked a few times and gladly took in the profits. If he was current on payments then the mortgage company should have written in a recommendadtion for charges to be dismissed. Now they lost their money and the man is ruined for life by a felony. Great! We accomplished a lot there. The only winner was the DA who got to put another notch on his or her belt. Oh, and of course the lawyers. They won too!

"so where's the crime here"? First off the 1003 or mortgage loan application clearly states that signing the document containing knowingly false information is a crime. So there's the crime. Now where is the harm? There are institutions that purchase mortgage backed securities that depend on the accuracy and validity of the information in the mortgage loan application to insure that their investments are adequately secured. When a mortgage loan application is approved by an underwriter that approval is determined based on the applicants true ability to repay the loan in accordance with the agreed upon terms. The stated income loan was never intended to allow the applicant to pick a number out of the air that would support the transaction. The stated income loan was offered so applicants who's income, because of the nature of their occupation, was difficult to determine could still qualify for a mortgage. That stated income was typically supported by the type of occupation the borrower had and the amount of accumulated wealth the borrower had. In the case of this borrower, he apparently had investment real estate and probably a large amount of accumulated liquid assets. On it's face that would all seem fine. Now train for a run across the desert, go to Africa and spend alot of money and all of a sudden the accumulated wealth is used up and with it goes the assets that were used to qualify borrower for the loan. Keep in mind, when an underwriter determines that a borrower is qualified for a loan that qualification isn't based on the question, can the borrower make the payments today? It is primarily based on the question, has the borrower demonstrated the willingness to repay this debt, (credit history) and has the borrower provided enough truthful, accurate information to determine his ability to repay the debt over time? The crime you are questioning whereabouts of is contained in the last half of the previous sentence. Don't come back with, "the lenders can always reposess the property". Mortgage lenders aren't in the real estate business and don't want to be.

"Mortgage lenders are not in the real estate business and don't want to be"????

Uh, yes they are. Constant ads on tv and in the papers, 'buy a house, live the good life, you deserve that lawyer foyer and 1/2 acre lot, great room, living room, dining room, full basement, gourmet kitchen with granite countertops, etc'; as the lending money was given out like candy, the 'prices' of these matchstick-built POS glorified shacks went through the roof, (heh) and everybody jumped on the bandwagon. If you loan out 300K instead of the 100K the place is actually worth, you make SOOOOO much more in interest payments. The borrower pays almost nothing but interest for years and years, frequently moves before they have any equity, etc. It was a giant game of musical chairs and the mortgage banks knew exactly what they were doing. They were writing these loans thousands every day whereas most people only buy a house a few times in their entire lives. If the house is repossessed the whole game just starts over again. How many houses built in the 1920s in this country still have mortgages on them? They'll never be paid for, they're cash cows for the banks.

What really needs to be discussed here, besides the extreme amount of money that was spent prosecuting this guy, is where the bailout money really went? I'll tell you; back in 2008, when China realized they had bought billions in MBS that were fraudulent, they told the US government that unless they were reimbursed, they were going to send 'their people' here to claim the land and houses, lot by lot by lot... the panicked Ben Bernanke and Hank Paulsen went to Congress and told them to come up with the money immediately, no questions asked (there's a clue) or there would be 'martial law'. Why martial law? Because a land invasion of Chinese investors claiming their properties would have caused a bit of an issue, right?

Hey, MSNBC, do your homework, you'll find out I'm right. The money didn't go to 'the banks'; it was routed through the banks to China and other countries who had invested in the MBS. We the People were lied to, once again. Ask Ben where the money went, and don't take 'I dunno' for an answer.

Well...that explains it! All this hubbub about the financial crisis was due to people overstating their incomes! Geez, I am daft! I thought it was because the mortgage lending institutions were trying to make a profit at every turn, were complicit in overstating values on properties used as collateral, and generally greedy at the expense of everyone else. While I think the guy in the article got his just deserts, 9 out 10 people that I know, totally believe the lending instutitions got off with a hand slap. Which to me, is even more of a travesty. THEY manipulated the rules to benefit themselves at the expense of others and I really do not care how you attempt to dress that pig as anything else, a pig is still a pig.

It is rather bewildering how the banking industry and politicians can persuade people to blame themselves for the acts of others. You have people lining up to blame themselves and kneel before the Bankers of BOA. You have people who believe others should die if they lose a job and their health insurance, who actually believe that if all people were covered like in every other western civilized nation the U.S. would become communist or some other foolishness. Propaganda works is what politicians see time and time again. They hear their own lies recited right back to them.

I agree, Ken--and to signalfire, I hadn't thought of China actually coming over and taking property. I knew and know that they hold a lot of our debt, but I thought it was in the form of bonds. Wow--you gave me something else to think about!

And finally, yes, the guy DID do a fraud. And I understand that he opted for a trial instead of a plead. What galls me is that the big wigs at the national level have not had to face criminal charges--that just galls me!

Oh, and if he was current on his mortgages, then they should have picked on someone else who was not, if they were looking for an example. If he was not current on his mortgages, then that is a different story. And they would have a much better "example" if they went after the ones who concocted this whole 'liar loans' fiasco in the first place! And the ones who conspired to do away with the type of regulations and protections that acts like The Glass-Steagall act were created to give!

You are correct. The big boys changed the rules through congress to make it impossible to prosecute the top. So to fix this problem we should go after the people in congress who pushed this legislation through congress and charge them as terriorist, confiscate all their assets. I am old fashion and feel someone has to pay if the big slim is protected by congressional action then the congress people responsible for submitting the legislation needs to be charged and sent to Gitmo and forgotten or simply hanged. I believe this would have the desired effect on cooling legislation that gives protection to corporate fraud practices. I do not hate these congress people but see this as an ongoing problem that needs a permanent solution so we can move forward as a prosperous nation.

Isitreal. "Go after people in Congress?"

You know, we just tried that, and nothing changed, the US House is still controlled by republicans, the US Senate and White House by democrats and 21 out of 22 Senate incumbents won re-election.............All that talk about 'throwing out all the bums' was just bullsh!t, so we should put all the voters in jail for lying, right.

During the housing boom, when I was worried about selling my old house before buying a new house, the builder said, "we can just do a stated-income loan". When my sister didn't qualify for a loan, her broker told her to do a "stated-income loan". While I don't agree with what the guy did, the mortgage brokers made it seem like there was nothing wrong with "estimating" your income.

We didn't do these loans, but at the time, they convinced us that we weren't doing anything wrong. Slick salesmen. In retrospect, they remind of used car salesmen.

Aah, you're cute when you're mad!

madison, don't you see the precedent though? The bank escapes intact and is NOT punished. The guy was punished, and rightly so. But where is the total justice?

@Frisby The banks skating is tragic and incredibly insulting, but that doesn't mean this man's crime should be ignored just because everyone else gets away with it. You can't pursue fair justice by eliminating all justice.

Can someone tell me what the bank did wrong here. If the guy misrepresented his income to qualify for a loan that he would not have otherwised qualified for, then he's to blame. The fact that the bank offered no doc loans is irrelevant if he was not reviewed and approved according to the underwriting standards set forth by the lender for the no doc loan.

This is why I try not to break laws I get caught and others get away with it. I here it all the time, from I guy I work with, It's none of my business so I keep out of his business but he keeps telling me oh you can do this and that as a tax break, and I keep telling him if I did it I would end up in jail, and you be right behind me because I would turn you in. Nice guy maybe not but I'm not going to judge, I just have to work with him I'm waiting for the IRS and FBI to walk into the office one day.

@Matt if justice is incomplete it's not justice. It's using the law as a weapon against your enemies. That's unacceptable. Either go after everyone or no one. Justice is blind? In this case it wasn't.

The banks misrepresented their assets and stole billions from pension funds and investments. Everyone who owns a house was robbed and we're letting these people go free? How can you be an apologist for them and not be complicit in their crime?

bubba-1946427--hahahaha, I can identify with what you said in #7.4!! Add to that, Murphys Law!! On a more serious note (not that Murphy's Law and your's and my luck aren't serious!! :) !! ):

I have found that keeping to a high standard of ethics ALWAYS pays off in the long run. Not necessarily in terms of money, but in terms of being able to sleep at night and being able to live with oneself. And every once in a while, one's Higher Power gives one a glimpse of what good things have come about because of keeping to those ethics. And we also from time to time get --not just a glimpse--but a glaring example of the horrible things that come about when people DON'T keep to a high standard of ethics. Like the economic crisis. Also like that New England Compounding Center who's dirty manufacturing conditions caused the fungal meningitis outbreak.

That's not to say that we don't all make mistakes, or make poor decisions, or in a moment of selfishness don't kick aside our better judgement--we are all human after all. But when we DO make stupid choices, our best bet as human beings is to admit our mistakes, take our lumps, learn from our mistakes, and earnestly endeavor to not make those mistakes again.

Lisa, don't make me a high standards guy, I can get as low as the next guy, if I know I'm not going to get caught, and I'll sleep like a baby. Case in point you give me the US military and I'll solve the terrorist problem, you won't like me or how I'll do it but I guarantee as long as I have control you won't have a problem. No nukes. No American soldiers killed in the short term. Last longer than a week I may have to put soldiers in. Just in most cases I've found I'm not good at getting away with things so I don't try.

Hi bubba--I appreciate your honesty. There are times when situations are so frustrating, that it is tempting to think that something 'untoward' is the only way to solve it. One of the few things I am sure about, though, is that I do not have all the puzzle pieces to the universe. But if there is a Divine Creator, and I believe that there is, then it is that Divine Creator who has all the puzzle pieces, and that Divine Creator will honor my keeping to those ethics. I get my cue to my ethics by what Jesus said "All the law and the prophets are wrapped up in these 2 things--love God with all your spirit, soul, mind, strength and love your neighbor as yourself". I have done some stupid, untoward things in my life. I've also done some really difficult but ethical things in my life, and ultimately I have kicked myself in the butt for the stupid untoward things, and have been ultimately grateful and happy that I did the hard but ethical things.

The bank people went for a plea, while the individual opted for a jury trial. That's the difference in the sentence.

I guess the question is did he commit fraud? It looks like it. He got caught. Thousands of people didn't get caught. That doesn't mean he shouldn't be prosecuted. He still committed the crime. It's sad really. Far too many people don't take breaking laws seriously until it's too late.

All he had to do was do what he knew was right and he would have been fine. That one little point is where so many people fail. It's so simple and yet so many people find it so hard to do.

Also, I think the IRS agent went way overboard in his investigation and should be reprimanded at least for all the effort he put into convicting this little guppy. It sounds like he put almost as much time in convicting this guy as this guy spent in jail......

I agree David. This warrants telling the whole story. It's easy to make emotional assumptions, especially after you've read Neil Barofsky's book. It's time to get some proof and prosecute the bank / stock / hedge fund executives.

I agree too. The IRS is way past it's legal boundaries in investigating people. Its always funny to me how the little guy gets beat up and the big corporation gets forgiveness or bailout. Doesn't seem to matter which party is in office, they just can't get it right.

This guy was spending every waking moment training for some pointless foot race. I think his priorities were a bit screwed up. He probably began to feel invincible.

I can't help wondering what it will take for the influential, who can usually escape prosecution - like those hiding money in the Bahamas, Caymans, etc. - to realize the 99 per centers are getting pretty ticked off.

The lack of respect for a system that is not even handed is growing and does not bode well for the future of democracy....

History has too many examples of social upheaval due to major discontent of the masses to not at least consider this as a possibility threatening the status quo.... Singling out out this person's fraud over the the "banker-broker" fraudsters that started this whole economic mess suggests to me that somethings just isn't right or fair anymore...

How true jvtech!

I think what he is really saying is, "I got punished so why should everyone else get away with it?"

First my question is the same as the others, was he in default? How much taxpayer money was spent to research and then convict him? The IRS makes its own laws, haven't you folks noticed that yet. Much too much power. If the mortgage loans were being paid, there should not have been a case and the investigator should have been reprimanded for his wasting of money. The IRS requires their employees to bring in a certain amount of money in order to get a good work review. They don't care how they do it!

Yes, I noticed. And you have to wonder what the IRS agent thought he might uncover since the guy was just an individual taxpayer. At best it was an incredibly poor use of time. At worst it was government intrusiveness gone wild!

Well, considering the guy declared $400k of income on his mortgage application, and the IRS had no records of him having that much income, I'd say the IRS agent was well within his rights and authority to investigate.

In this case, it turned out the guy lied to the mortgage lender, but from the IRS's view, the guy could have been failing to report all his income to the IRS. When you declare you have $400k of income to a bank, but the IRS only has records of half that (or less), you better believe they are going to investigate your arse.

Stephen, the IRS didn't even know about the loans up front, so that couldn't have been the trigger for the investigation. According to the agent, he just "happened" to see this guy on a talk show and wondered how he could afford his training. Funny that he didn't consider a working spouse supporting him, or a supportive family. No, he immediately assumes tax fraud. Sorry, but I'm not buying that. There's more to this, and I suspect that "more" is a personal agenda on the part of this agent! My aunt worked for the IRS for years, and the stories she told about other agents' abusive investigations for the pettiest of reasons would curl your toes! And in most instances, those agents got away with their behavior because whistle blowing was a sure way to get blacklisted. And no, she was NOT a person prone to prevaricate or exaggerate.

"Well, considering the guy declared $400k of income on his mortgage application, and the IRS had no records of him having that much income, I'd say the IRS agent was well within his rights and authority to investigate."

read much?

They never knew about the loans until after 700 hours of snooping , wiretapping and finally a women undercover agent. He mentioned the loans in casual conversation to the women, its not like the IRS agent seduced it and started the investigation. Fact is the agent started it after seeing the story about long distance running on TV and "wondered" how he made money and trained at the same time. (read the story again)

Face it, after all that effort to find tax fraud they had to get him for something and that's what they did. What worries me is that a lone IRS agent can start that kind of an investigation on a citizen with no evidence at all other than "hmmmmmmm I wonder?" Who ok's that?

This is similar to punishing the rich that provide jobs for all of us....

oh Jaay didn't you hear? Romney lost the election. he won't be in power.

To be fair, he did catch something, but I am not sure the secret investigation was necessary. Isn't that what a tax audit is for?

He didn't catch any tax fraud and if they want they can always "catch something" anytime because virtually every things illegal. If they hadn't found the loan fraud they would have gotten him for something else. Probably for Obstruction arguing "he obviously obstructed the case because we didn't find any evidence of the crime we didn't' know he committed but we're sure he did something bad, and since we didn't find anything he must have hide it and thus obstructed the case!" You could probably get 10 or 20 years for that one.

Apparently he did...

...A federal jury in Norfolk, Va. determined that Engle lied about his income to Virginia-shore banks to obtain hundreds of thousands of dollars in mortgages at the height of the real estate boom only to default, causing the banks to lose $400,000....

http://www.news-record.com/content/2012/01/26/article/local_runner_charlie_engle_requests_new_trial

Good and valid point. Yes he lied but did he default?

The guilty parties are the loan companies and banks. Unfortunately they all go scott free, for the most part, due to political ties. The consumer, gets screwed again. The amount of time and cost expanded by the misguided IRS idiot is appalling if this guy didn't default.

Agreed.

I believe it. After more than a year with letters back and forth, the IRS said I still owe about $1200 and have 90 days to file in tax court if I disagree, so I paid the $60 to file and the case is pending. Simplify the tax code, not even the IRS understands it.

Say Rothschild........

You had me until you spewed the Obama catch phrase "millionaires and billionaires." Can't you libs even try to not sound so liberal?

"millionaires and billionaires."

Kind of like "makers and takers","handouters", and "union thugs", isn't it?

A couple of key items conveniently left out of this article:

Mr. Engle was ordered to pay $262,500 in restitution to the owner of his mortgages because he defaulted on 2 of his mortgages.

He defrauded the bank with his 'liar loan' that he chose not to pay back even though he had the money to pay.

WHINE WHINE CORPORATIONS WHINE WHINE, would you like some cheese with that whine of yours?

You catch and convict those you can reach. Sometimes it's low-hanging fruit like an idiot that talks about his illegal acts with a woman thinking he's going to get a piece of a$$.

Morons go to jail when they do things like that. White, black, white collar, blue collar, the cops and feds nab who they can and call it a day.

HOW MUCH fraud has to happen before you're, "ok", with the investigation? 10 thousand? 1 million, 5 million, 20 million?

You catch and convict those you can reach.

So corporations are unreachable then?

*golf clap*

Btw, I'm a business student at a top MBA program. I love business. We have this thing called "corporate responsibility" that instills this thing called ethics into what we do.

It keeps businesses from destroying the economy, like what happened here.

@ Fact - You know business ethnics has only started being taught for a relatively short time now. Before they were taught to do whatever they had to for the corporation.

The mortgage broker, the loan officer, and the seller of one of the properties pled guilty, so they were all charged and convicted. So Engle was not the only one.

“And all the Charlie Engle’s in the world rotting in jail aren't going to accomplish that goal.” No, but it's a good start. It would probably be better to let him rot on house arrest, with an ankle bracelet. Then society would not be required to pay for his food, utilities, clean sheets, and medical care.