For my loyal readers, you may recall the story of Gladys (not her real name) the loan fraud. It has been 4 years since I first reported the story and questioned whether or not the Jefferson Country Sheriff’s office did anything other than issue speeding tickets. At that time Gladys has just acquired a home loan using someone else’s social security number. I had alerted the victim, who lived in New York, and filed a complaint with the Jefferson County Special Crimes division. A licensed Colorado private investigator had uncovered an amazing trail of fraud stretching back years, in which Gladys had used several aliases and a half dozen different social security numbers. In each case she had racked up debts and then failed to pay them back. Bankruptcy and foreclosure seemed to be among her favorite pastimes.

This entire file was attached to the complaint I submitted to the Jeffco Special Crimes division. To my general disgust I was informed at that time, by Officer Chris Nelson who was assigned the case, that this did not rise to the level of fraud according to his department. Instead I was told that Gladys would have to go into foreclosure yet again, before his department considered it a case of fraud. Apparently “harm” has to be demonstrated for fraud to have occurred and the fact that a history of harm had been adequately demonstrated was of no consequence. The other instances of fraud had not occurred in his jurisdiction, so he could not pursue her on that basis. I pointed out that the current lender was harmed already, in that they were deprived of viewing her actual credit history when they made her a $250,000 loan. By providing misleading information on the application intentionally, she had already fraudulently deprived them of pricing according to the true risks involved. The reality was that had the mortgage company been aware, they would never have made her any kind of loan. How could this not qualify as fraud I thought? I even called one of the most prominent real estate lawyers in the state, who laughed at this notion. He said she had (assuming my facts as presented) obviously committed fraud and should be prosecuted in his opinion too. I was of course in a state of shock.

Fast forward to 2006 and I receive a call from Gladys’ neighbor, who after reading my column over the years had correctly guessed her real identity. He, like me, had been frustrated to learn that a career of criminal fraud causing hundreds of thousands of dollars in losses was so easily swept under the rug by law enforcement. But he had news…the house Gladys owned was in foreclosure now. Well you can imagine my surprise. Finally, I thought some kind of justice would surely prevail. I called Chris Nelson’s office and left him a message, as soon as I hung up with the neighbor. We traded two calls and left messages for each other, but nothing indicating he had any intent of pursuing the matter. My last two calls have gone unreturned.

So who knows what will happen. Officer Nelson has an otherwise good name in the real estate community and is known to speak at identity theft prevention seminars. Although one wonders if his department has ever once prosecuted a case of identity theft or fraud? For my part, I will probably get another ticket for going 35 in a 30 mph zone down by the lake. I haven’t had one in a few years and it will soon be my turn to take one for the team. Meanwhile, Gladys is probably at home packing her belongings and contemplating what new name she would like to be known as. More importantly she is certainly busy selecting the next social security number she will use. Since she still works in the mortgage business, she will have her choice of new identities to choose from. Let’s all just hope it isn’t one of ours, because little things like identity theft and fraud are apparently no big deal in this neck of the woods.

For expert advice on any aspect of home finance, call the professional. Dan Smith can be reached at 303-674-0201 or visit his web site at www.ColoradoHomeLoans.com anytime!