Identity Theft Steals More than Appraiser’s Good Name

By Terrie Petree

 

This article is the second in a four part series on valuation fraud and the appraiser.

 

For Georgia appraiser Jayme Kortman the most difficult part of Daniel D. Thompson’s mortgage fraud and identity theft trial was the long procession of character witnesses. “He had a line of family members and friends behind him that would go up and say what a good person and a good citizen he was and how he didn’t deserve any of this,” Kortman said. Kortman could make the same argument for herself; she didn’t deserve any of the trouble Thompson caused her when he forged her signature on over 300 appraisals. Unfortunately, IndyMac and other lenders don’t allow an expert team of character witnesses to testify in the defense of appraisers who have erroneously landed on exclusionary lists. Instead, Kortman stood virtually alone when it came to clearing her record of the 300 bad appraisals that Thompson put her name on.

 

It began in January 2005 when Kortman received a phone call from Thompson asking her to sign off on an appraisal he had done. “I didn’t know who he was. I had never seen him, never met him in person,” Kortman said. But, it wasn’t unusual for new appraisers to seek out Kortman’s help. With fourteen years of experience as a certified appraiser, Kortman was accustomed to getting phone calls from trainees who would ask her to train them. When Thompson called, he told Kortman that he was close to getting his license and just needed a few more hours before he would be finished. Kortman told Thompson to send her a copy of the appraisal he wanted her to sign off on, and she would review it.

 

“It was a bad appraisal. There was no way I would have signed off on it, and I let him know that,” said Kortman. “The appraisal he had done was one that I had completed a year before. I did the appraisal for a purchase, and he was doing it for a refinance. I knew the area very well, and I knew the value that I had put on the appraisal. I think he thought that because I had completed it previously I would go along with it.”

 

Kortman didn’t go along with it; she didn’t like Thompson’s work and she said as much, but he didn’t let her disapproval stop him. “He had a copy of the appraisal I had performed a year before and it had my signature on it,” Kortman said. For a year, and without Kortman’s permission or knowledge, Thompson used her name, electronic signature and license number whenever he needed it. The forgeries worked so well for Thompson that, within the same year, he also had appraisers working under him who used Kortman’s signature on their reports too.

 

The fraud may have continued indefinitely if not for the intervention of Kortman’s former business associate who was working as a review appraiser for Washington Mutual. “I received some phone calls from a friend of mine. She told me that there were reports that were coming over with my name on them, but they didn’t look like my work. After a few more phone calls from her I also received a letter, I think it was from IndyMac, telling me that my name was on an exclusionary list,” said Kortman. This was the moment of clarity. “Once I got that letter I put two and two together, and I thought about my phone conversation with Daniel Thompson. I immediately called the sheriff in my area and told him I thought I had an identity theft case.”

 

After her phone call with the local sheriff, Kortman was put in touch with an identity fraud detective in the county where Thompson resided. In addition, her friend at Washington Mutual told her about Georgia Assistant Attorney General David McLaughlin who crusades against mortgage fraud and is quoted as saying his goal is “to put people in prison.” “I don’t know where I would be right now if it weren’t for him,” said Kortman of McLaughlin.

 

McLaughlin prosecuted Thompson, and the case went to trial. McLaughlin did not have the time or resources to go after Thompson for all 300 fraudulent appraisals, so Thompson was charged with twenty-five cases of mortgage fraud and one case of identity theft. Although Kortman was the only identity theft victim, McLaughlin’s team had so much evidence against Thompson that she was not even needed as a witness. Instead, she sat in the courtroom and watched the proceedings. Although the character witnesses were difficult to listen to, Kortman knew that “…in the end the case against him was strong enough.” In May of 2006, Thompson was sentenced to five years in prison.

 

While Thompson sits in prison, Kortman tries to undo the damage done to her good name. “My name has been put on dozens of lenders’ exclusionary lists because of his poor work. I’ve had to work very hard to get my name off. IndyMac was the hardest to work with. They would not budge until he was convicted. They would not even talk to me.” Assistant Attorney General McLaughlin actively sought assistance from lenders asking them to carefully review Kortman’s name if it was included on do-not-use lists. However, Kortman is learning that it is much more difficult to remove her name from watch lists than it was to land on the lists in the first place. “My name is still on a watch list. My name is flagged. It has been a struggle with those lenders who put me on their lists. They’re not even giving me a chance. I’ve had to replace clients that I lost because of it. Getting more business hasn’t been a problem, but it was very heartbreaking.”

 

For Kortman, the experience is not just heartbreaking, it is also lonely. “I’ve heard of appraisers’ names being put on exclusionary lists for other reasons, but no one who has had their identity stolen.” Although Kortman doesn’t personally know any other colleagues who have had their signatures stolen and forged, a steadily growing number of appraisers nationwide are finding themselves the unwitting victims of identity theft as part of the increasing number of mortgage fraud cases perpetuated by the cooling housing market.

 

Partners in crime, Todd Kolbe and Kelly Abercrombie, were recently convicted for up to thirty cases of mortgage fraud in and around Manatee County, Florida. At least twenty-four of the fraudulent mortgages, some of them reaching values in the multi-millions, involved the blatant forgery of a Sarasota appraiser’s signature. Abercrombie’s attorney attempted to underplay the forgeries calling them “meaningless gestures” and justifying the identity theft by stating that Abercrombie’s “intentions were noble” because she was trying to pay her employees not make off with millions. Abercrombie’s so-called “noble intentions” will do little to clear the name of the appraiser whose identity was stolen and misused by Kolbe and Abercrombie.

 

In a similar case, Virginia resident Robbie Colwell was sentenced on January 8 to forty-six months in prison for his role in a multi-million dollar flipping scheme in which he forged the signatures of two different appraisers. Colwell is not a licensed appraiser, but that did not stop him from writing appraisal reports. He stole the names, signatures and license numbers of two certified appraisers after working as an assistant to both appraisers. He used the stolen identities as the brushstroke of credibility on appraisals that grossly inflated the values of properties that he and his partners flipped for profit. “He did not sign his name to the appraisals at all,” said Assistant U.S. Attorney Virginia Cheatham. Cheatham worked on the prosecution team along with U.S. Attorney Jeffrey A. Taylor and Joseph Persichini, Jr., Assistant Director in Charge of the FBI’s Washington Field Office. “We’ve certainly convicted appraisers before, but this is the first case that I have prosecuted where the person pretending to be the appraiser used someone else’s name,” Cheatham said.

 

One of the names and identities that Colwell used was that of Barry Sacks, an appraiser with twenty-seven years of experience who lives in Gaithersburg, MD and is owner of Appraisers USA. Like Kortman, Sacks didn’t have any idea his name was being used until the damage had already been done. “Someone knocked on my door one night and said, ‘Barry Sacks,’ and handed me a book. It was a subpoena. I went through it that night, and that’s when I figured it out. The next day I hired an attorney,” said Sacks. The subpoena included Sacks as a co-defendant in the conspiracy, bank fraud, wire fraud and money laundering case against Charles Hall, a former loan officer, of Accokeek, MD. Hall paid Robbie Colwell to forge appraisals, but because Colwell never used his own name in association with any of the fraudulent appraisals, attorneys from what Sacks described as the “heavy duty D.C. law firm” who were bringing charges against Hall believed that Barry Sacks played a role in the fraud. Because Sacks moved quickly after receiving the subpoena, the prosecution was able to clear his name of any wrongdoing. “They got my name cleared, and I joined their team—quid pro quo,” Sacks said.

 

Clearing his name with the “heavy duty” law firm was just the beginning of an uphill battle for Sacks. “A couple of months pass and I get a phone call. The FBI wants to question me, and then nothing happened for maybe two years. It dried up and went away. The first week of January 2006 I get a phone call; it’s the FBI.” The case was going to trial, and the prosecution wanted Sacks to testify. “I was scared. I didn’t want to testify; I was scared for my safety,” said Sacks. In the end, the prosecution had enough evidence against Hall and Colwell to convict them without Sacks’ testimony. Colwell was sentenced to forty-six months in prison and Hall to 293 months.

 

The similarities between the experiences of Jayme Kortman and Barry Sacks continue; while the guilty serve out their prison sentences, the innocent struggle to free themselves from unfair punishment. “It continues to cost me,” Sacks said, “I’m blacklisted on appraisers lists. I’m going to these companies to get my reputation back.” For Sacks, getting his reputation back means working with his lawyer to assemble a team of character witnesses even if it is just on paper. “We’re putting together a packet with pleadings and sentencings. If they don’t let me back on their [safe] lists, we’re going to sue them for lost wages.” There is no other recourse. Until exclusionary lists include a comprehensive review and appeal process appraisers have to protect themselves.

 

“We’re concerned about the safety of our appraisers and their work,” said Tom Dean, National Director of the Foundation of Real Estate Appraisers (FREA), “That’s why we’re introducing new products this year that will protect the identity of our appraisers.” Using the NDC/ValueConnect network of professional appraisers, appraisers now have the ability to guarantee that their work has not been compromised along the supply chain. This is done by using the NDC Appraisal Fraud Guard (AFG) online verification system and stored appraisal keys. Using AFG appraisers can ensure that their work is authentic and that it was created by the appraiser who signed the document.

 

For more information on identity theft and the NDC Appraisal Fraud Guard, please contact 800-882-4410.