And brokers should take steps to ensure they resist the temptation

Jerome Mayne, founder and president, Fraudcon Inc.

As published in Scotsman Guide's Residential Edition, October 2006.

There are many aspects to mortgage fraud. One, which many mortgage brokers sometimes overlook, is conspiracy to commit mortgage fraud. Conspiracy, however, is a crime. Further, conspiracy to commit fraud can send a mortgage broker to prison, regardless of whether the fraud is successful.

Consider the following two fictional scenarios:

• Rafael enters the warehouse carrying a metal attaché case. His partner, Francisco, is working feverishly at a computer terminal.

  Rafael removes a plastic flash drive from his case.

  "With these codes," he says, "you'll be able to divert all wire transfers coming into the escrow company. The diverted funds will be deposited into our offshore account. The codes will work for the next 15 hours.

  "I'll see you in Costa Rica on Friday, when we execute the final phase -- the laundering of all the money," Rafael says.

• Mike tells his processor: "Hey, Joe, will you do me a favor? Johnson got fired."

  "Wait, Johnson is supposed to close on the loan Monday," Joe says. "But if he's got no job, he's got no income, and he can't close on Monday."

  "The loan's already approved with the job he had," Mike says. "No one will know he got fired as long as we don't say anything. I'll buy you a real nice jacket or something when it closes."

  Joe agrees to say nothing.

Now, which scenario is a conspiracy? If you guessed both, you need more training. That's not because you'd be wrong, but because you shouldn't be guessing. Both scenarios fall under the definition of a criminal conspiracy.

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