Is negligence a crime? Naples bank manager changes plea in mortgage fraud case

Should Debra Landberg be charged with a crime for not doing her job?

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When a Wachovia bank branch manager signed verifications of deposit for general contractor Scott Fawcett of East Naples 3½ years ago, she never verified that his bank account balances totaled $530,864.67.

It turned out Fawcett lied, inflating account balances for himself and his wife, Heather, a model: They only had $970.75.

Because Debra Landberg didn’t do her job and verify deposits, the couple received three mortgage loans for $2.27 million and were later foreclosed on.

But Landberg, a 22-year Wachovia employee, didn’t conspire with them or get a dime. She just wanted to be a good employee by following Wachovia’s motto to “wow customers,” quickly helping a valued customer who always was in a hurry.

In the end, Landberg, 44, who managed the Airport-Pulling Road branch, was fired and she and Scott Fawcett, 29, were among more than 200 charged in a statewide mortgage fraud investigation. Fawcett is serving nearly 3½ years in a federal prison for falsifying a mortgage application and receiving $3.349 million in loans for six homes that went into foreclosure; prosecutors agreed not to charge his wife.

When it was time for Landberg’s sentencing Monday, however, her criminal intent was in question. Her two defense attorneys questioned it, so did the judge and even the prosecutor.

“The government has some concerns about whether Ms. Landberg actually knew she was committing this crime,” Chief Assistant U.S. Attorney Douglas Molloy told U.S. District Court Judge John Steele. “There is no evidence she received any money for this. The only motivation for this was to keep a valued customer happy at the bank.”

As Landberg stood before the judge, shaking and crying in a long navy polka-dot dress, Steele didn’t see a crime he could sentence her for — or intent — just that she’d been negligent in her job.

She pleaded to one of three counts in her indictment, aiding and abetting the Fawcetts, saying she’d verified that they had $353,209.09 in their accounts, which enabled them to get a $1.5 million loan. They only had $13.57.

Unlike murder, which has a lesser manslaughter charge for a killing without intent, the judge pointed out there is no lesser mortgage fraud charge for negligence and no intent.

“Maybe she did wrong by banking policy — and I think she did wrong by more than that — but that’s not what she’s saying,” Steele said, admitting he’d taken her plea and was now hearing a different scenario.

Landberg’s sentencing then came to a screeching halt.

The judge allowed Molloy to discuss the problems with defense attorneys John P. Cardillo and Yale Freeman of Naples, agreeing to meet with them afterward in his chambers.

Many of the 18 people who came to court to support Landberg or ask for leniency, including two brothers, her former and current bosses, tried to console her, hugging her and her husband, Lawrence.

When everyone returned, Cardillo announced they’d agreed Landberg would take back her guilty plea. Tearful and visibly shaking, the mother of two told the judge she understood she was headed back to trial or plea negotiations.

“Either you got lucky or unlucky. I can do it tomorrow,” Steele told them.

Attorneys needed time and agreed to head to trial some time in December.

Attorneys and Landberg declined comment afterward, but her brothers and former boss contended she’d done nothing criminal and suggested Fawcett used the bank’s copy machine to copy more verification forms that weren’t signed by Landberg, who’d told FBI agents she’d signed only one.

“The reason they’re doing this is because of political pressure and the mortgage fraud cases,” said Landberg’s brother, Peter Van Brummelen, adding that two prosecutors tried to get the case dismissed but their boss refused. “These are trumped up charges. There was nothing. She never benefited from this. She never got a cent.”

Now, he said, she and her family are suffering financially trying to pay $70,000 in legal fees so far.

Another brother, David, said they come from a police family — her father, and two brothers were cops — and she trusted investigators so much, she would have admitted anything.

Tawanna Concepcion, Landberg’s former manager, said the bank now has a program to verify deposits and now customers must pay to get copies of them. When Fawcett came to the bank, the copy machine was accessible to customers and Concepcion, who works at another local bank, believes he used it to add Landberg’s signature to his other inflated bank account balances.

“There was never, ever any training for employees for verifications of deposit,” Concepcion said of when she and Landberg worked there. “Now, they’ve created a department that employees call for verifications of deposit. It has a central location and does all verifications of deposit.”

Friends and family hoped the Molloy would drop the case, but Cardillo was mum.

Landberg faced up to 30 years in prison, but her attorneys contend her small act wasn’t the final verification by Wachovia, which ignored red flags about the Fawcetts’ credit.

In a memorandum seeking leniency — one to three years of probation and 50 to 100 hours of community service — defense attorneys contended Landberg was duped.

“She had no reason to jeopardize her job by participating in the Fawcetts’ fraudulent schemes,” they wrote. “Mrs. Landburg was used by theFawcetts and, but for her own lapse in judgment, would not be facing the circumstances she finds herself in now.”

Attached to the 26-page memo was an affidavit by a licensed mortgage broker, who said the verification of deposit form is of limited value to the overall loan requirements. Defense attorneys wrote:

“Clearly, the lender and the closing agent were responsible for making sure up-to-date information was contained in the file before closing any loan on behalf of Mr. Fawcett.”

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