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Real Estate & Property Law

: Florida Community Association Construction Law Blog

Court Ruling Favors Victims of Bank Scam - Victory by Levin Tannenbaum

By Alan E. Tannenbaum


Levin Tannenbaum Litigation Team Wins Court Victory for Victims of Mortgage-Banking FraudCourt ruling favors victims of bank scam
By John Hielscher
Published Sarasota Herald-Tribune: Tuesday, July 21, 2009 at 1:00 a.m.

It took nearly six months, but a federal appeals court has denied motions to reconsider its decision that awarded victim status to hundreds of Coast Bank loan customers.  Those Coast borrowers are now closer to sharing in restitution that will be paid by former Coast banker Philip W. Coon and his co-conspirator loan skimming.

The court's ruling also should help clear the way to imprison Coon, who pleaded guilty to federal charges in November.  Sarasota attorney Alan Tannenbaum, who represents 156 Coast customers, said Monday he was happy to finally get the ruling.

"We hope for a speedy path to having the restitution claims completed, so that the borrowers who have lived with this thing for years can put this behind them," Tannenbaum said.

At issue was determining who were the victims of Coon's loan skimming scheme, Coast Bank or the loan customers.

Federal prosecutors, as well as Coon's attorney, contend that Coast was the victim. Since Coast is now defunct -- sold at steep discount in 2007 to First Banks Inc. of Missouri -- the federal government would take over Coon's assets through forfeiture.

But Tannenbaum, invoking the federal Crime Victims Rights Act, has successfully argued in court that the Coast customers were ripped off and should get restitution.

Their loans ranged from $180,000 to $360,000. They were overcharged an extra point, or 1 percent, so borrowers could receive from $1,800 to $3,600 in restitution.

Federal judges postponed sentencing for Coon and Tampa mortgage broker John Robert Miller, the co-conspirator who also pleaded guilty, until the victims issue was resolved.

The U.S. Attorney's Office or James E. Felman, Coon's attorney, can still appeal to the U.S. Supreme Court, although that is not considered likely.

The 11th Circuit of the U.S. Court of Appeals originally ruled in December that the Coast borrowers were victims of the fraud. Prosecutors and Felman filed motions for rehearing in January. The court denied those motions last week.

"We just received those documents, and we are in the process of reviewing them, so at this point we are not going to make any comment," said Steve Cole, spokesman for the U.S. Attorney in Tampa.

Felman said he has not discussed the latest ruling with his client.

"We have not made a final decision, but Mr. Coon has always admitted his guilt and has been desirous of going to jail and serving his punishment as soon as possible. He's not interested in delaying the proceedings," Felman said.

As part of their plea agreements, Coon and Miller will be ordered to each pay $1.5 million in restitution, representing the amount they skimmed off loans to Coast customers.

Coon has agreed to forfeit his Bradenton home, a second house, brokerage accounts, jewelry and other items. But that will not come to $1.5 million.

The former executive vice president and head of residential lending at Coast pleaded guilty to conspiracy to commit wire fraud and money laundering. He faces up to five years in prison and a $250,000 fine.

He admitted pocketing with Miller an extra 1 percent fee on Coast loans to build homes with Construction Compliance Inc., a defunct St. Petersburg builder.



Full post as published by Florida Community Association Construction Law Blog on July 21, 2009 (boomark / email).

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