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Felix Adamo /The Californian

In this February photo, Julie Farmer, right, the sole defendant without a plea deal in the Crisp

The only trial to come out of Bakersfield's $30 million Crisp & Cole Real Estate mortgage fraud case is expected to focus on whether the woman who prosecutors say was the firm's No. 3 person understood what she was doing there was illegal.

Julie Dianne Farmer denies preparing the fraudulent mortgage applications at the heart of the case, saying she had a limited role in a very busy office. She maintains her biggest fault was putting too much trust in her bosses.

"Julie Farmer acted in good faith in all her actions while employed at Crisp and Cole," her Fresno defense attorney, Tony Capozzi, said in a written statement.

"She was not aware of any fraudulent activity or of any conspiracy during her employment. Crisp and Cole was the first real estate company that Ms. Farmer ever worked for. She was taught by people with far more knowledge and experience in the real estate industry."

Farmer is the only one of 15 defendants in the case without a plea deal. Her former employers, David Crisp and Carl Cole, have each been sentenced to 17 1/2 years in prison and ordered to pay restitution of nearly $30 million after agreeing to plead guilty to conspiracy to commit mail, wire and bank fraud.

Besides arguing Farmer did only what she was ordered to do as part of her job, Capozzi plans to present expert testimony that she is not a "corporate psychopath" who could knowingly perpetrate a white-collar crime for a period of years.

A psychological evaluation filed with U.S. District Court in Fresno concludes the 45-year-old mother of two children (age 17 and 21) scored very low on a specialized personality test, suggesting she "possesses nearly zero characteristics of a psychopath."

The U.S. Attorney's Office has accused Farmer, the now-defunct company's former chief operations officer, of helping direct a conspiracy that defrauded mortgage lenders between January 2004 and September 2007.

Farmer is scheduled to go to jury trial Tuesday in Fresno to face charges of conspiracy to commit mail, wire and bank fraud, six counts of mail fraud, four counts of wire fraud and one count of conspiracy to commit money laundering.

The fraud conspiracy count carries a maximum penalty of 30 years in prison. Each wire and mail fraud count comes with a maximum of 20 years, while the money-laundering count carries a maximum 10 years in prison.

Any actual sentencing would be up to the judge in the case.

Prosecutors say the conspiracy made money by using falsified loan applications to buy and sell homes multiple times, often with 100 percent financing. Sometimes the firm recruited "straw buyers," including friends and family members, to buy the properties.

Many of these homes ended up in foreclosure when the real estate market crashed in late 2006 and early 2007. Prosecutors say the scheme cost mortgage banks about $30 million in losses.


Court filings show Farmer had little or no background in real estate before she started working for the company as a bookkeeper.

After finishing high school in Taft, she attended community college for a year and bible college for a year before earning a medical assistant certificate. She then worked at a physical therapy practice for 14 years. Not until after she started working with Crisp and Cole in April 2004 did she take an online course to get a real estate license.

During her psychological evaluation, Farmer told Fresno psychologist Harold L. Seymour she handled the company's financial transactions as Crisp's assistant. She denied preparing or reviewing any loan documents but was tasked with arranging for people to come sign documents at the office.

Farmer told Seymour she had not heard the term "straw buyer" until investigators mentioned it after she left the firm in April 2007, when the company was unable to keep up with mortgage payments. She told Seymour that Crisp described the firm's property-flipping model as one of "joint venture investments."

"Ms. Farmer described herself as naive with regard to the operations of (the company)," the clinical and forensic psychologist wrote.

"She said she should have been smarter, but her interpersonal style is to be trusting of others. She said she was aware of 'inconsistencies,' but didn't find out until later that what was going on constituted fraud."

But some of her former co-workers apparently told the psychologist Farmer was aware of the fraud scheme while it was happening.

Seymour wrote that people Farmer worked with at Crisp & Cole "indicated that she knew what she was doing and didn't show any concerns."


Prosecutors claim Farmer managed the company's business operations and business accounts, and that she had a central role in furthering Crisp & Cole's fraud conspiracy.

Papers filed in court by the U.S. Attorney's Office say former employees of the company and other defendants are expected to testify that Farmer "knowingly participated in the scheme."

The documents say these witnesses may testify to Farmer's alleged statements about her knowledge of "false statements on the loan applications and her intent to obtain the loans based on false loan applications."

The prosecution has stated it also plans to call on expert witnesses who can testify about financial transactions involving Farmer and others, as well as her education and licensing in real estate.

Farmer's lawyer stated that it is important to note that she was never a loan officer for the firm.

"She had little involvement in the loan process at Tower Lending (Crisp & Cole's mortgage arm), nor did she have knowledge of any loan fraud that may have been occurring between a loan officer and lender while she worked at Crisp and Cole," Capozzi stated.

The prosecution has filed a list of 73 witnesses it may call to testify at Farmer's trial. Among them are 25 current or former FBI agents, and six defendants in the mortgage fraud case: Megan Balod, Sneha Mohammadi, Jeriel Salinas, Kevin Sluga, Leslie Sluga and Jerald Teixeira.

The defense's witness list has 74 names, including three defendants in the case: Caleb Cole, David Crisp and Jennifer Crisp.

The trial is expected to take one to two weeks.