Some experienced white-collar hands assembled for closings Monday in one of the few federal mortgage fraud cases to hit a Northern California jury.

Judy Yeung, a Chinese-American woman well known in political circles — her business cards read “The Honorable Lady of San Francisco” — is accused of using straw buyers to obtain fraudulent mortgages totaling $6.5 million. Yeung’s case is fairly representative of the Justice Department’s local mortgage fraud docket; since the housing market collapsed federal prosecutors haven’t brought any large-scale indictments against corporate lenders in the Bay Area.

Assistant U.S. Attorney Susan Badger, the Northern District’s mortgage fraud coordinator, tried Yeung’s case, along with her colleague Jeffrey Rabkin. A pack of white-collar AUSAs showed up in court to watch Rabkin deliver closings. Prosecutors called several witnesses who cooperated with the government, but their testimony was corroborated by wiretaps featuring Yeung, Rabkin said.

Jones Day partner Martha Boersch, a former federal prosecutor appointed by the conflict panel to represent Yeung, tried to cast some of the blame on the lenders themselves, including Washington Mutual. The banks wanted to churn as many loans as they could, and every mortgage at issue in the case had been sold off to investors.

“These lenders didn’t care what was on the loan applications,” Boersch said.

Rabkin called that argument “illogical,” because according to the law (as described to the jury by Northern District Judge Susan Illston), it is irrelevant if the banks are careless, gullible or even negligent.

“The question is whether the defendant and others had an intent to deceive them,” Rabkin said.

A diminutive woman with glasses and a bob haircut, Yeung refers to herself in Chinese as “Auntie” on the government’s wiretaps. The San Francisco Chronicle has described her as a florist. Yeung eventually founded the nonprofit American Educational Foundation International; according to court documents, AEFI was designed to raise money for schools in need of financial support.

AEFI got involved in the city’s redevelopment projects in the Hunter’s Point neighborhood of San Francisco, attending political fundraisers, court filings say, and at one point the IRS audited AEFI. The Chronicle published a story in 2004 about the group’s political contributions to Mayor Gavin Newsom and many others. No governmental action was taken against AEFI at the time.

Those activities didn’t figure into the government’s mortgage fraud case, which lasted about three weeks (the defense rested without calling any witnesses). Instead, Rabkin portrayed Yeung as deeply in debt and desperate to save her luxurious San Francisco home.

“The defendant’s plan was to use five different people to obtain loans that she herself could not qualify for,” Rabkin said. The mortgages went for Yeung’s own residence, along with investment property in San Francisco and Gilroy, Calif.

But Boersch pilloried one of the government’s key witnesses, mortgage broker Alex Yee, as part of a cocaine-fueled office who kept documents in the trunk of his car. Boersch delivered her closing at a very fast pace, prompting the court reporter to ask her to slow down at one point. Rabkin played on that during his rebuttal, noting, for example, that “the defense just said a lot of things and she said them quickly,” and that they “whizzed through some inconsistencies.” Rabkin also told them to question “everything they just threw at you.”

According to the defense, it was Yeung’s ex-husband Mike Farrell who actually cooked up the mortgage fraud scheme. Boersch said that dynamic was captured on the wiretaps, and she read a police report describing a domestic violence call at Yeung’s residence.

But Rabkin responded with another of Yeung’s statements recorded by the government before indictment, in which Yeung suggested they “just place all the blame” on her ex-husband.

“This defense was written in 2007. You heard it in the defendant’s own voice,” Rabkin said.
source=http://lawyers-law.com

Tags: american educational foundation, bob haircut, chinese american woman, dc government, dc government closing, diminutive woman, federal government, federal government closed, federal government status, federal prosecutors, former federal prosecutor, fraud cases, mortgage fraud, political circles, san francisco chronicle

This entry was posted on February 3, 2010 at 1:31 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Posted in Breaking News by Breaking News No Comments Yet