Florida Man Pleads Guilty To Inflating Mortgage Values

admin —  January 26, 2009 — Leave a comment

Steven Gordon, 49, Miami, Florida, pled guilty to wire fraud charges related to a five-year scheme to inflate the value of mortgage loans to increase his commission compensation. Sentencing has been scheduled for April 23, 2009 at 9:00 a.m.

Prior to his dismissal in 2006, Gordon was a principal at Bayview Financial, LP, a Coral Gables-based finance company that buys portfolios of loans from lending institutions. Bayview Financial pooled these loans into newly formed business entities, called “special purpose entities,” and then issued securities backed by those loans to the investing public. During fiscal years 2006, 2005 and 2004, respectively, Bayview Financial and its affiliates securitized approximately $2.056 billion, $0.954 billion and $1.428 billion, in offerings of residential and commercial mortgage loans, including $1.989 billion, $0.884 billion and $1.243 billion of residential mortgage loans.

While employed at Bayview Financial, defendant Gordon held the title of “Director of Residential Acquisitions.” One of Gordon’s primary duties was to negotiate the purchase of thousands of loans for Bayview Financial’s residential mortgage securitization program. Gordon’s incentive compensation was based, in part, on his ability to buy those loans at a low cost.

Today, Gordon admitted that between 2001 and 2006, he engaged in a scheme to defraud Bayview Financial, in which he regularly altered credit information affecting the value of more than 2,800 loans acquired for Bayview Financial’s residential mortgage securitization program. Gordon’s fraudulent scheme caused Bayview Financial to pay him more than $2.8 million in excessive and undeserved bonuses.

R. Alexander Acosta, United States Attorney for the Southern District of Florida, commended the investigative efforts of the FBI and the Miami Regional Office of the Securities and Exchange Commission. Mr. Acosta also recognized Bayview Financial’s outstanding cooperation with this investigation. This matter is being handled by Assistant U.S. Attorney Ryan Dwight O’Quinn.

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