Michael J. Wynne - Former U.S. Atty, Southern District of TX Joins Houston's Morning News

Episode Transcript

Speaker 1 (00:00):
Well, you know, I live on the suburbs. I've always
been a suburban kind of guy. I would not exactly
call Colony Ridge the suburbs. Colony Ridge is a community
in and of itself. I'm not even sure how many
people live in Colony Ridge at this point, but I
think that I'm not sure they know how many people
live there. There's it's just the whole thing is just

(00:21):
completely convoluted. There's been a lawsuit that evidently has been
settled between the FEDS and the developer of Colony Ridge
over predatory lending practices. Michael J. Wynn joins, a former
US attorney Southern District of Texas. For some reason, of
all the problems that the Colony Ridge has caused, this

(00:41):
seems to be kind of low on the list of
things that would concern me as a tax paying citizen
of the greater Houston area. Michael, But is this one
of those things like you go after al capone and
tax evasion charges. You can't do much about what's already
going on with people who buying homes or you're maybe
here illegally, so you go after what you can go after.

Speaker 2 (01:06):
Yeah, one thing, I'm a former assistant the United States
Attorney for quite a while in public corruption, not the
United States Attorney that said, yeah, this is sort of.

Speaker 3 (01:16):
The and similar to the going.

Speaker 2 (01:18):
After the subprime mortgage lending in two thousand and eight.

Speaker 3 (01:24):
You know, there's only so much, unfortunately to be done
that the money's gone. They try to do something to
impact the president going forward with injunctions civil enforcement, not
any type of criminal action. This is a little different
because involve sella financed raw land contracts, but it's the

(01:47):
same sort of formula over and over, never really helping
the victims out.

Speaker 1 (01:51):
Yeah. You know, from from the standpoint of what constitutes
criminal activity, how do you go about looking at something
like a colony reach and trying to german what else
may be going on there that could be criminal in nature?

Speaker 3 (02:09):
Wow, criminal nature? That's going to Here's the thing that
the fair housing types of statutes are more applicable here
for something criminal nature, you need to find an individual
specific intent to do something criminal. To defraud a mortgage company.

(02:33):
This is the challenge. We've got seller financed seller financed mortgages,
and the problem was targeting specific markets. Uh, there's just
no federal criminal statute that fits this fact pattern. You know,

(02:54):
you may have developers flipping houses for straw borrowers. We
saw a lot of those kinds of prosecutions in the past.
This is a really fit a civic civil program since
you don't have a specific individual on whom you can
pay a specific lie.

Speaker 1 (03:15):
Yeah, from a technical standpoint, what does the law say?
What does Texas law say? Do you know, sir, about
the ability of somebody who's in the country illegally to
buy real estate? Is that something you can do?

Speaker 3 (03:28):
Well, You're not going to be able to manage to
do it because you're going to have to get yourself.
You're going to have to get yourself a traditional law
and the traditional bank of financing source is not going
to do that. So you're going to have to go to,
you know, somebody to sell a financing like this on
the fast and loose. This is exactly what happened. It's

(03:49):
hard to say that, you know, they were targeting immigrants,
because those immigrants were harmed just as much as anybody
else would be, you know, purchasing one of these deficient products,
and then what they're doing here is selling it, reselling
and reselling it. You sell it at a rate that
spot to default, then you turn around and resell it again.

(04:11):
So they're taking advantage of all lending practices. That's why
they got hit by both the States and the Feds.
Also why it's well hanging through, you know, because it's
not Wall Street investors who are losing their money. It's
much easier to hit now, not a meaningful one because

(04:32):
I'm not sure how much this is going to stop
future practicing.

Speaker 1 (04:35):
Right right, while all they're out is some money at
this point, right nobody's going to jail because of this.
Maybe somebody shouldn't. It's not my position in order to
be able to make that judgment, but it seems to
me that if the only thing you're doing is paying
a fine, there's nothing there to prevent you from doing
it again.

Speaker 3 (04:52):
Well, there'll be some injunctive relief, but what they're going
to do is reincorporate as new entities and go ahead.
You know. I think it's unfortunately that it's not a
criminal case. I think you could make criminal case, but
it's hard, it's much much harder, takes more time, more resources,
and so too often the government in areas like this

(05:13):
just go forward to stay lo hanging fruit. The civil
civil offense, take the settlement, take what money they can,
and move on.

Speaker 1 (05:20):
Okay, thank you, sir, appreciate your time. Michael J Wynn,
former US attorney