A federal jury deliberated nearly two hours before acquitting the former vice president of Wachovia bank in East Naples of mortgage fraud charges involving a local contractor.
As the clerk read “not guilty” on the first of four counts, Debra Landberg, 44, stifled a sob Wednesday night as she stood with defense attorney Lee Hollander of Naples and investigator John Hisler, who patted her back, trying to console her.
The 10-woman, two-man jury, who heard from five government witnesses and Landberg during a one-day trial in Fort Myers, found her not guilty of three counts of filing a false statement and a count of making a false statement to FBI Special Agent Kevin McCormick.
After U.S. District Judge John Steele excused the jury, Landberg cried as she hugged her husband, Larry, and her two brothers, retired police officers.
“I’m going to go home and hug my kids,” Landberg said of her son and daughter. “... This has been going on for so long, I’m still in shock.
“I can’t thank the jury enough for listening, really listening,” added Landberg, who was indicted in October 2009 and spent about $100,000, most on her former defense attorneys, to prove her innocence.
The case illustrates the wheeling and dealing in the banking and loan industry during the real estate boom, when homeowners and brokers inflated financial figures to obtain loans.
Landberg lost her job for not verifying East Naples contractor Scott Fawcett’s bank account balances, had to leave her insurance job due to the possibility of conviction, and she now cleans houses. Her East Naples home is now in foreclosure and her mother lies in a hospital bed fighting cancer, unable to see her daughter get acquitted.
Hollander called the verdict appropriate.
“I knew when the second row of jurors came in and (a female juror) was smiling,” Hollander said. “Jurors who convict don’t smile.”
Assistant U.S. Attorney Douglas Molloy, who blamed people like Landberg for the real estate market’s collapse, declined comment, his office’s policy.
A juror said there wasn’t enough evidence to prove Landberg committed a crime and they didn’t believe the star witness, Fawcett, who admitted he hoped to reduce the roughly 3½-year prison term he’s serving for a $3.349 million mortgage fraud. His plea deal enabled his wife, Heather, a model who has since become a nurse, to avoid prosecution.
The juror, who didn’t want her name used, said jurors didn’t think Landberg, who was naive and didn’t do her job, should take the fall for what Fawcett did — and he should be punished more severely.
The case had a long history since Landberg’s indictment, which was among more than 100 cases involving brokers, Realtors, lawyers, police officers, home owners and others in a statewide probe by the FBI, bank investigators and other agencies, including the Collier County Sheriff’s Office. Even Time magazine took notice.
In Landberg’s case, two prosecutors tried to drop charges, but bosses refused. The judge and a magistrate rejected two plea bargains negotiated by Landberg’s prior defense attorney, John Cardillo of Naples, ruling she was only negligent, which is not a crime.
Landberg, who’d paid them about $70,000, then hired Hollander, who has won several acquittals. He showed jurors Fawcett committed other frauds after cooperating and he was lying to reduce his sentence, which includes five years of supervised release. On his release, he must pay lenders $1.48 million, their loss after the foreclosed homes were sold.
The trial involved Requests for Verifications of Deposits (VODs) Fawcett gave Landberg, who completed them using information his Miami mortgage brokers provided on documents. The VODs, which show average two-month account balances, are sent to lenders for loan approval.
Testimony showed Fawcett, a trusted customer, moved large amounts of money back and forth nearly daily, used the bank copy and fax machines, and admitted forging his wife’s name.
Shackles clinking, his hands and feet in chains, Fawcett walked into court in a red jail uniform marked “Lee County Jail,” where he’s being held until his return to a South Carolina federal prison.
Fawcett, who owned Fawcett Homes and other businesses, admitted his brokers filled in documents he provided to Landberg.
“My mortgage brokers told me what my amounts needed to be in order to get the house and I told Debbie and she put those on there,” Fawcett testified, referring to account balances. “I think she knew I didn’t have it in there.”
Using a movie screen, Molloy showed jurors the three VODs and supporting financial documents.
The Fawcetts then purchased at least six homes, most investments for resale by his business. However, he admitted using a $1.5 million loan to help his company after the market went bust and he faced foreclosures.
After he testified that Landberg “made up” a money market account on a VOD, Hollander’s cross-examination showed jurors it was his wife’s account, which was listed in documents he gave Landberg.
Hollander also showed Fawcett gave Landberg several accurate VODs, “lulling her into a false sense of security,” he said. She’d testified Fawcett would throw tantrums in the bank, which she wanted to avoid. She said it was her job to take care of customer needs.
She called him demanding, always in a rush. On three days she verified balances, she said he gave her deposit slips showing he’d moved a large amount of money into an account, or was about to.
She admitted not verifying the accounts because he was a trusted customer. She denied lying to the FBI, saying at the time she’d only been told of one VOD that caused her termination.