Recent media coverage of the sentencing of the principals in the mortgage fraud case did not tell the whole story. When the story broke, over a year and a half ago, it was the lead story. Photos of the accused were plastered all over the front page.
From a business standpoint, the indictments and publicity did those people in. But who cares, right? They were eventually convicted. They're going to jail and paying millions in restitution. And that's true for all but one of them.
One of the accused is a single mother bringing up four teenage kids by herself. She was born and raised in the small village of Nenana and, over the years, built a successful small business from scratch. She employed and mentored dozens of people, some of whom have gone out and started new businesses of their own. She's put hundreds of Anchorage families into the home of their dreams, legally and honestly. She lobbied for a bill that requires state licensing and regulating of the mortgage industry, to improve ethics and accountability to the public.
She woke up one morning to see her photo on the front page of the newspaper, indicted on 13 federal felonies. Immediately all her underwriters dropped her, even for transactions in process. Her business folded, she laid off all of her employees, and scavengers came to pick over her used furniture and half-empty packages of copy paper. The builder walked off the job on her development project and the lender shut it down. She incurred tens of thousands of dollars in attorney fees. Money for daily survival became an issue.
Most devastating of all, perhaps, her children became terrified that their mother was going to be sent off to jail and they would be abandoned. They were tormented by classmates and their performance plummeted. Two lost their hair.
The alleged offense? My friend had owned a company that employed a person at a branch office who made fraudulently documented loans. While that's not good, it's not a crime. My friend had not participated in it, not condoned it -- in fact, she had not known about it at all.
We talked about this often. At one point she was stressed to the breaking point and wanted to meet for a drink. All the other defendants were pleading out and cooperating -- she was the only one left. Now the feds had offered to drop 12 of the counts against her in return for a guilty plea on one. The real kicker was no jail time -- she'd be able to take care of her kids. She had one day to decide.
As we talked, she kept coming back to one factor: She was innocent. The next day she called to say that she had rejected the offer, and that her children all supported her decision. That took real courage, real integrity. (Would I have that much faith in the legal system? Would you?) She and her lawyer prepared for trial.
A few months later she called again. She was in tears. Out of the blue, the federal prosecutors had told the judge that they were going to drop all charges against her. We're not talking "not guilty" (like O.J. Simpson); we're talking innocent -- completely vindicated. She was free.
Great! However, her business was gone, her reputation was destroyed, she had incurred a license fine and she was broke. The stigma remains.
I don't blame the feds -- I think they made an honest mistake. I don't blame the real estate people who stopped referring clients to her -- they have lots of options. And I don't blame the media. The Daily News did run a small story when the charges were dropped, but, honestly, "all charges dropped" is not a headline that grabs the reader.
I am proud to know this woman. She is courageous, capable and honorable, and she does a great job for her clients. I hope she and her family prosper again. My friend's name is Suzan McCready.
Kirk Wickersham is an Anchorage lawyer and real estate broker.
By KIRK WICKERSHAM