DENVER — A Boulder man has been sentenced for bank fraud and identity theft, United States Attorney Jason R. Dunn announced in a news release from the Department of Justice (DOJ) on Monday.
Michael Scott Leslie, 57, of Boulder, will serve 5 years in federal prison for bank fraud and aggravated identity theft, followed by 5 years of supervised release.
According to Leslie’s plea agreement, he owned, operated or otherwise had an interest in several business entities, some of which were operated out of Colorado, the DOJ said. The entities were involved in or affiliated with financing or originating residential mortgage loans. Through these business entities, Leslie sold residential mortgage loans to investors, including an FDIC-insured bank in Texas, or the “the victim bank," according to the DOJ.
Between October 2015 and October 2017, the DOJ said Leslie devised and executed a scheme to defraud the victim bank by selling it 144 fraudulent residential mortgage loans valued at $31,908,806.88, the DOJ said. These loans were purportedly originated by one of Leslie’s companies, Montage Mortgage, and “closed” by another of his companies, Snowberry, which earned fees for the closing. The loans were then presented and sold to the victim bank until Montage identified a final investor. For these 144 fraudulent loans, that final investor was Mortgage Capital Management (MCM).
The DOJ said Leslie never disclosed to the victim bank that he operated MCM and Snowberry, or the fact that sales to investor MCM, even if they had been real, were not arms-length transactions.
The 144 residential mortgage loans sold to the victim bank were not real loans, the DOJ said. The borrowers listed on these 144 fraudulent loans were real individuals, but they had no idea that their identities had been used as part of the sale of the fraudulent loans. The defendant had access to their personal identifying information in one of two primary ways:
- The borrowers had used Montage for legitimate residential real estate transactions which were properly executed and closed
- The borrowers had been solicited by Montage about refinancing their existing loans.
In the case of refinance transactions, the DOJ said Montage secured permission from the borrowers to request credit scores and history from the major credit agencies but then told these would-be refinance borrowers that they did not qualify for a refinance. Leslie then recycled the borrowers’ information, obtained through prior legitimate transactions or attempted refinances, to create and sell nearly $32 million of fraudulent loan packages.
Leslie pleaded guilty on July 31 and was first charged on June 5, the DOJ said.
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