Banking Law

Texas, the state that leads the nation in the number of executions each year and also the state that appears to lock up a disturbing number of innocent men, now appears to be shooting for the status of the number one state for the length of sentences given to mortgage fraudsters.

In a recent case that even raised the eyebrows of a spokesman for the Texas attorney general's office, a woman in the Lone Star State was sentenced to 99 years in prison for mortgage fraud. Yes, you read that correctly: nearly a century in jail. Though other recent Texas mortgage fraud convictions have seen prison sentences of between 18 months and five years, Kandace Yancy Marriott of Gun Barrel City, Texas, got the maximum sentence possible after being found guilty of orchestrating a complex mortgage fraud scheme where she received monthly mortgage payments from her clients, failed to remit those payments to the mortgage lender and embezzled the homeowners' funds, causing her clients to default on their home loans.

Why did Marriott get the book thrown at her? Apparently, being convicted of committing multiple felonies in Texas gives the judge discretion to add years of jail time for each one.

In this case, the convicted defendant and her husband did a lot of damage to subprime borrowers and to HUD. Moreover, the commission of multiple felonies gave the judge the flexibility to go wild in the sentencing phase, and everybody knows what happens when judges go wild (especially on Spring Break). Finally, there's been so much mortgage fraud in Texas for such an extended period of time that it's becoming almost (but not quite) equal in perceived vileness to horse-rustling in The Lone Star State. Kandace is lucky the authorities didn't find a rope and a handy Live Oak tree with sturdy branches. As just one comparison, convicted aiders of Islamist terrorists were just sentenced to terms ranging from 15 to 65 years by a Dallas court. Terrorists can't hold a candle to a mangy mortgage fraudster in these here parts.

Although Tom Kelley, a spokesman for the Texas AG's office, was surprised at the judge's ruling, saying he was "shocked" when he heard the sentence, one of the reasons is simply that the state can be - and often is - very harsh in doling out sentences to people convicted of multiple felonies.

David Glickler, the state's prosecuting attorney, said that these are the rules in the Texas legal system. "That's the beauty of Texas punishment," he said. "We go from five to 99 years."

"Beauty." Not precisely the noun I would have used, but a very telling use of it by Mr. Glicker. I suppose that their is a certain "beauty" in unfettered flexibility of punishment options. Then again, "beauty" is often in the eye of the beholder.

Mr. Glickler added that during the trial, he pointed out that every false statement made is a second-degree felony and proved to the jury that Marriott had made hundreds of false statements, each being a first- or second-degree felony.

The harsh sentence was also due in part to the prosecution revealing at the trial that Marriott ran a massive organized fraudulent operation for years. "It was a criminal enterprise," said Mr. Kelley.

"The fraud that was being committed was part and parcel of the everyday course of business. She trained all of her staff on how to manipulate and massage documents," Mr. Glickler said. "They manipulated and tricked buyers into not even knowing who owned homes. She was instrumental to the whole process; she didn't just run the company that did this."

The defendant didn't win any sympathy for herself during the course of the trial. She apparently never met a truth that she could tell.

Mr. Glickler said that she was caught lying multiple times in her testimony, not just over the case itself - although she did testify she wasn't hands-on with the business when multiple witnesses claimed she was - but over trivial and tangential matters.

For example, during the trial, it came up that she and others opened an events hall in downtown Corsicana and got a liquor license for the property. Marriott testified that when they opened the events hall, the hall owner insisted the license be in Marriott's name to expedite the process. She said in her testimony that she was unhappy to do this, as she was a fundamentalist Christian who didn't drink, but complied. However, the prosecution proved that the license wasn't in Marriott's name.

"Why would she lie about something as silly as that? I think she wanted to see if jurors were religious and they could bond over the topic," said Mr. Glickler.

One my friends, a recovering mortgage broker, said that she was a victim of her chosen line of work. "She couldn't help herself," my friend asserted. "She was a mortgage broker. It's what they do." My friend's tongue did not appear to be jammed in his cheek when he made that statement, but I wasn't looking closely at him at the time. It might have been.

The fun's just begun in this matter. The defendant's husband, daughter and sister have also been indicted and are awaiting trial. I'm not a criminal defense attorney, but if I were representing one of the yet-to-be-tried, I would think a plea bargain might be looking better and better each day.