The catalyst to the investigation of Crisp, Cole and Associates was Bakersfield appraiser Gary Crabtree. He blew the whistle on them and suffered for it.
But, now he can enjoy a measure of vindication.
"It was back in the summer of 2006 when Gary Crabtree first shared with us his alarming information on the fraud he suspected was going on, the same information he had shared with local law enforcement.
But, local law enforcement told us back in 2007, they were ill-equipped to chase down the mortgage fraud bad guys.
"I would say that mortgage fraud is beyond the scope of a local law enforcement agency, yes," said Sgt. Alan Abney, Bakersfield Police Department in July 2007.
But, with Crabtree's dossier on the duo known as Crisp and Cole, the FBI chased the paper and, after four years, federal indictments have now been issued.
"I knew it was going to be inevitable, just a matter of time. I first discovered all the fraud as a normal course of duty as an appraiser because we verify comparable sales. And, when I started seeing sales that didn't make any sense in the market, I started doing additional work and uncovered this can of worms," said Crabtree.
It is, perhaps, the biggest case of alleged mortgage gouging in the golden empire.
"Crisp and Cole aren't the only ones. There are many others who were partaking of the same kinds of fraud," said Crabtree.
And, Crabtree says it shouldn't have taken this long to stop it. "Insiders knew what was going on, but no one stepped forward to report it."
Crabtree became something of a pariah within the lending and appraisal community after he blew the whistle. Some mortgage lenders stopped calling.
He claims business dropped by 30%
Now, he feels somewhat vindicated, but also disappointed.
"I did what was right. I reported the crime, but it was much bigger than most people thought it was. Victims? there were numerous victims. The straw buyers who lost their credit and homes and the lenders themselves," said Crabtree. "In this particular case, losses of up to $40 million, and the taxpayers lose because we're the ones who had to bail them out."
Crabtree says restitution is probably out of the question if these defendants are convicted.
But, punishment can be as harsh as 30 years in federal prison for each count, plus a $1 million fine.
