Bank Executive Sentenced for Mortgage Fraud

Allison Tussey —  February 28, 2013 — Leave a comment

Joel Blanford, 44, San Ramon, California, was sentenced by U.S. District Judge William B. Shubb to 30 months in prison, to be followed by three years of supervised release, for a mortgage fraud scheme.  On September 19, 2012, following a seven-day trial, a jury found Blanford guilty of six counts of mail fraud.

According to evidence presented at trial, from approximately April 2003 through October 2005, Blanford, while working as a senior sales representative for Long Beach Mortgage, a wholesale subprime lender and former subsidiary of Washington Mutual Inc., participated in a scheme to defraud his employer. Blanford earned compensation based on the volume of loans processed by Long Beach Mortgage. The evidence established that he paid a loan coordinator in cash and checks to falsify documents, provide false verification of borrowers’ employment or professional licensing status and turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage.

In each of the years 2003, 2004, and 2005, before taxes and payroll deductions, Blanford received more than $1 million in commissions and other compensation from Long Beach Mortgage as a result of his scheme. Between April 2003 and October 2005, he paid the loan coordinator more than $50,000 in checks alone.

U.S. Attorney Benjamin B. Wagner announced the sentence.

U.S. Attorney Wagner stated, “This investigation exposed a sophisticated chain of fraud that started at the homebuyer level and extended all the way to banking insiders. It is a lesson that those earning million-dollar paychecks are not exempt from significant criminal penalties.”

This case was the product of an investigation by the FBI and the Internal Revenue Service-Criminal Investigation (IRS-CI). Assistant U.S. Attorneys Paul A. Hemesath and Michael M. Beckwith prosecuted the case.

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Allison Tussey

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