Crisp & Cole ex-staffer pleads guilty to federal fraud charges
| Monday, Sep 28 2009 11:15 PM
Last Updated Tuesday, Sep 29 2009 12:30 PM
"I'm looking forward to manning up, to standing up and doing what's right -- doing what maybe some others in this are not willing to do."
-- Jerald Teixeira
Former Crisp & Cole loan officer
Images
Jerald Teixeira from the advertisement for Tower Lending, the mortgage arm of Crisp and Cole Real Estate, June 2006.
David Crisp and Carl Cole
FBI personnel exit the residence of David Crisp at 10509 New Quay Ct.
A file photo of David Crisp taken in May 2006.
Two years after a highly visible raid by federal agents investigating Crisp, Cole & Associates, a key former employee pleaded guilty Monday to taking part in mortgage fraud and agreed to cooperate with prosecutors.
Jerald Allen Teixeira's plea agreement is the first criminal proceeding in a federal investigation into borrowing and investment activity at the once high-flying company. In September 2007, FBI and IRS agents raided 13 local sites looking for evidence of criminal wrongdoing at the now-defunct Bakersfield real estate firm.
Teixeira, 29, worked as a loan officer at Crisp & Cole's lending arm between October 2005 and January 2007. In Fresno federal court Monday he admitted to committing wire fraud on the job and now faces up to 20 years in prison and a fine of up to $250,000 at his sentencing, set for March 22.
A court document central to his case lays out prosecutors' allegations of mortgage fraud at the firm, including accusations that principals David Crisp and Carl Cole directed the crime.
Under the plea agreement, prosecutors may recommend leniency in exchange for his help on the case.
Reached at his Bakersfield home Monday night, Teixeira acknowledged he has done wrong and said he's anxious to make things right again.
"I made a poor decision in my past," Teixeira said. "I'm looking forward to manning up, to standing up and doing what's right -- doing what maybe some others in this are not willing to do."
An assistant U.S. attorney involved in the case, Kirk Sherriff, would not say whether any related plea agreements were pending, or whether any charges would be brought soon.
"Just say the investigation's ongoing and we continue to push forward aggressively," Sherriff said.
He added: "We intend to explore fully with Mr. Teixeira all the information he can provide as to everyone else involved in this scheme."
'Scheme and artifice'
A court document signed Sept. 18 by Teixeira and his attorney, David Torres, lays out a "scheme and artifice to defraud mortgage loan companies and federally insured lending/financial institutions ... of money and property." It says Teixeira was complicit but that what he did was "mainly at the direction and request of" Crisp and Cole, as well as office manager Julie Farmer and Chief Financial Officer Sneha Mohammadi.
Crisp and Farmer could not be reached for comment Monday. Mohammadi declined to comment.
Cole, contacted by phone Monday, denied knowingly participating in any fraud scheme. But recently he said he has become aware of wrongdoing "that I had no idea was going on."
The court document says Teixeira processed at least 60 mortgage loans for property represented by Crisp & Cole. It says his criminal conduct involved 10 or more lender victims, which in all were defrauded more than $1 million.
On many of the loans he processed, Teixeira used false and fraudulent information, some of it provided by borrowers, some by Crisp & Cole employees, the court document states. It says the information related to borrowers' income, employment status and buyers' intent to live in the property; all such information can affect a homebuyer's chances of obtaining a mortgage and its terms.
Teixeira himself purchased 11 properties with a total value of $4.4 million between October 2004 and December 2006, the document shows. In order to buy them, it says, he lied or left out important information about his income and his debt from other purchases.
Under the terms of the plea agreement, Teixeira is not allowed to reverse his plea or ask for additional leniency not already spelled out in the agreement. Nor is he allowed to leave the boundaries of the Fresno district court, meaning he cannot travel to places including Los Angeles without special permission.
In addition, Teixeira must cooperate with law enforcement "as directed by the government," including answering questions in court proceedings.
Torres, Teixeira's attorney, said the plea agreement was beneficial to his client because it means there will be no trial.
"What if I took this case to trial?" Torres asked. "You could potentially have jurors who lost a home or knew someone who lost a home because of this mortgage crisis.
"Obviously, Crisp & Cole was a real estate organization involved in this national tragedy," he said.
Torres declined to speculate about what kind of sentence Teixeira will receive. But the the 20-year maximum outlined in the plea agreement is not realistic, he said.
"He will not be sentenced to 20 years," Torres said. "I cannot give an estimate, but I believe justice will be served."
Although Monday's plea is the first significant federal court action related to Crisp & Cole, the company and its former employees have been the target of recent civil lawsuits, some of which allege patterns of mortgage fraud similar to those described in Teixeira's plea agreement. Separately, the state Department of Real Estate revoked the licenses of Crisp and Cole last year.
