Real Estate & Property Law

Lawyer Who Fought Foreclosure Fraud Takes Federal Plea in Straw-Buyer Money-Laundering Conspiracy

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A Florida title attorney who is playing a prominent role in the fight against mortgage foreclosure fraud by lenders has taken a plea in a federal case over an alleged mortgage fraud conspiracy.

Carol Asbury, 59, could get as much as 20 years in prison and a $250,000 fine when she is sentenced next month, the Palm Beach Post reported.

The alleged scheme involved payments to straw buyers to pretend they were purchasing high-priced homes in Wellington. Using fraudulent loan documents, participants obtained loans for more than the purchase price and pocketed the difference, according to prosecutors.

In a telephone interview with the ABA Journal, Asbury repeatedly used the word “regret” as she explained that she got into trouble during a rough time in her life when she wasn’t paying enough attention to what was going on in her law practice as she focused on issues at home. Her husband, she said, got very ill at one point and had to have brain surgery. But when the sole practitioner turned her attention back to her work after that, she realized she had gotten seriously off track.

Asbury said that initially, she didn’t understand that her law office was doing anything wrong. And when she came to her senses and realized otherwise, she did her best to make everything right. In a single day in 2007, she closed her law office. Then, with the help of a lawyer, she voluntarily cooperated with the feds and turned over her files. Her current work, helping homeowners deal with foreclosure fraud, is also an effort to make amends.

“I’ve tried to do the right thing. … I have cooperated with them, and I regret the decisions, and I wish that I had never stepped into this area,” she said. “But it did. It happened. Unfortunately.”

Despite the millions in loan money cited by prosecutors, Asbury says she didn’t make “the kind of money that they’re talking about.” She said she just made her usual attorney fees. “I took my title fees. That’s all I took.” Because some large transactions were involved, those fees could be as much as $8,000 or $10,000, plus an attorney fee, she explained.

Asbury says she also changed the way she works, realizing that it was a mistake to try to do everything in the office, especially when she wasn’t there a lot. In July, she turned over her law practice to another Florida attorney. Before that, she said, she had someone she trusted overseeing the practice and didn’t touch money herself, focusing instead on what she knew best—the law. She also became a part of a group of attorneys that met once a month and talked.

When you’re overwhelmed, “you’re going to make bad decisions, and you need to seek help from people. If I had done that, this would not have happened, and that’s what I try to tell people,” she said.

After taking the plea, she expects repercussions as far as her law license is concerned. However, she is hoping to avoid a prison sentence. “If the worst happens,” she said, “I’ve still done the best I can the last four years.”

Two co-defendants who also pleaded guilty to conspiracy to commit mail fraud and money laundering face the same maximum as Asbury, the Post article notes. Charges were dismissed against a fourth defendant, a former University of Florida and professional football player, and a fifth defendant is still on track for trial.

A Housing Wire article published in April details the charges brought against Asbury and eight others in three separate indictments.

One of the eight, Michael Samuda, 38, is also a Florida attorney. An April 2010 press release from the U.S. Attorney’s Office for the Southern District of Florida discusses the case against Michael Samuda, a Florida attorney and title company owner.

An April 2011 article in the Palm Beach Post says more than 25 individuals, including Asbury, were indicted or charged in connection with alleged fraud concerning real estate deals at the upscale Versailles development in Wellington.

“I find it very disturbing that the government must use all their resources to attack the people that are exposing the fraud and corruption,” Michael Redman, who oversees, told the newspaper at that time. “Where are the indictments on all the known felonies committed by the banks, foreclosure mills and doc shops?”

Related coverage: “Attorney Carol Asbury Indicted by DOJ, FBI, IRS, FDLE and Secret Service”

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