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Henry A. Barrios / The Californian

Julie Farmer, second from right, arrives at the U.S. District Court in Fresno Wednesday morning with her husband, Charles Farmer, and other family members and her attorneys, not pictured, for her trial in the Crisp

FRESNO — Lawyers for Bakersfield mortgage fraud defendant Julie Farmer opened their defense case Wednesday with testimony that the former office manager had limited authority at Crisp & Cole Real Estate, and that she has proved herself honest and dependably hard-working.

On the trial’s sixth day of testimony, Jack Doremus, a former real estate broker and agent at the firm, said Farmer was a staff supervisor who had no authority over the firm's real estate agents. If she gave orders, he said, they originated with company owners David Crisp and Carl Cole.

“She basically did everything that David and Carl told her to do,” he said.

Bakersfield architect David Milazzo also testified to Farmer’s lack of authority, saying she “didn’t attend any” of the high-level meetings in which Crisp and Cole met with him and others to plan a 30-story, mixed-used condominium tower project the firm was working on in the mid-2000s but which was never built.

He said Farmer appeared to take direction from Crisp and Cole, not make decisions. “From my perspective, Julie was an administrative assistant to David and Carl,” Milazzo said.

In the case of both of those witnesses, however, the picture may have changed slightly under cross-examination by Assistant U.S. Attorney Kirk Sherriff.

Doremus explained that, on ethical grounds, he had refused an invitation by Crisp to buy a property under false pretenses. The implication seemed to be that Doremus was kept in the dark about the malfeasance that got the company in trouble, and which the prosecution alleges Farmer participated in or at least was aware of at the time.

Milazzo, for his part, conceded under Sherriff’s cross-examination that the tower meetings did not deal with the residential mortgage fraud cases at the heart of the criminal trial.


Other witnesses told the jury about Farmer’s reputation for truthfulness. Her boss at Brinderson LP, an engineering and construction firm active in local oil fields, testified that he knew her to be honest and truthful, and that her work there since 2008 has established the “gold standard” against which he measures other project control managers under his supervision.

William McElroy added under cross-examination that while he knew little of her work for Crisp & Cole, he would have a hard time believing that she had knowingly used false information on loan applications to secure home loans.

Similar comments came from Farmer’s pastor at Canyon Hills Assembly of God Church in Bakersfield. The Rev. Wendall Vinson said he sees her weekly in church services, and that he believes her to be a “truthful and honest person” who is very sincere in her faith.

Prosecutors have alleged Farmer was involved in directing a mortgage fraud ring led by Crisp and Cole, both of whom pleaded guilty to conspiracy to commit mail, wire and bank fraud. Each has been sentenced to 17 1/2 years in prison.

Farmer has maintained she was unaware of any illegal activity and was only following orders. She is the only one of 15 defendants without a plea deal.

She faces 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 prosecution rested its case Tuesday. The defense began presenting its case Wednesday morning and expects to call three more witnesses, including Farmer, on Thursday before making final arguments Friday. The proceedings are being held in U.S. District Court in Fresno.


Wednesday’s proceedings included some of the most dramatic moments of the trial so far. A former Tower Lending loan officer who had just testified to being unaware of false information on mortgage loan applications at the now-defunct Crisp & Cole real estate lending affiliate contradicted himself under cross-examination by a prosecutor.

Jordan Lewis, who has not been charged in the federal mortgage fraud case, grew increasingly nervous shortly before noon as Assistant U.S. Attorney Henry Carbajal peppered him with questions about a Jan. 4, 2006, email from loan officer Christopher Lance Stovall, who has taken a plea deal in the case.

The email instructed Lewis to ask a borrower what he wanted his job position to be listed as on a loan application and to tell the borrower what his start date at the job should be. Both pieces of information are key components to "stated income" mortgage loans, the kind Lewis said he commonly handled at Tower.

Lewis said he did not ask borrowers to lie about their jobs or their job history.

"I don't ask them to make (up) a job," Lewis said.

Testifying under direct examination by Farmer's Bakersfield attorney, Scott Howry, Lewis said falsification of mortgage applications — a common practice at Tower, according to prior testimony — wasn't done in the open and wasn't easily detectable by co-workers. The implication was Farmer may not have been aware of it, either.

Lewis said he didn't even know that his friend Stovall, with whom he shared a very small office, was falsifying loan applications. Stovall, however, testified last week that certain aspects of the practice were done openly, and that Farmer knew about it or should have known.

But Lewis changed his story under cross-examination by Carbajal. He conceded that contrary to his answers to Howry, it was possible he knew of "straw buyer" transactions, in which mortgage loan applicants purchased homes only nominally, when in fact the property was owned by someone else, in this case the operators of Crisp & Cole Real Estate, also referred to as Crisp, Cole & Associates.

"I may have" been aware of such deals, he said. "Apparently I worked with some pretty shady people."

He added that he could not be sure information on loan applications he himself handled were not altered afterward by someone else at the office.

When court reconvened after a lunch break, Lewis said he couldn’t recall but that he “possibly” participated in false verification of deposits, which other witnesses have said were used at Crisp & Cole to deceive loan underwriters into thinking borrowers had more assets than they really had. Lewis went on to say involvement in such deceit would be improper.

Carbajal then asked him about a home loan application Lewis had prepared stating Crisp’s mother, Tu Crisp, had $60,000 in her bank account on Aug. 22, 2006.

The prosecutor displayed an email exhibit from that same day in which a loan processer at the company told Farmer that Tu Crisp needed $56,038 deposited to her account immediately.

“I’m working on it,” Farmer responded, according to the exhibit.

Lewis testified that Farmer had not told him about any need for such a deposit when he signed the loan application, and that he had no knowledge of the arrangement.


Another defense witness, business litigation lawyer Michael St. Denis, testified for more than an hour about an investigation he worked on for more than a year for one of the lenders Crisp & Cole did loans for, the now-defunct Fremont Investment & Loan.

St. Denis said he initially named Farmer in a lawsuit he ended up filing on Fremont’s behalf as a result of that investigation, but that later he removed her name as a defendant, citing an undisclosed settlement that had been arranged with her. Many other employees and executives with Crisp & Cole and Tower Lending remained as defendants, though the suit never went to trial.

Under cross-examination, St. Denis said he met with Farmer and she was helpful to his investigation, but that she never disclosed details of a type of straw buyer deal she and her husband worked out with Crisp & Cole on a house the couple bought in Shaver Lake.

Farmer was attentive to Wednesday’s proceedings, occasionally smiling at supporters in the gallery and asking questions of her counsel.