SACRAMENTO, CA—U.S. District Judge William B. Shubb sentenced Joel Blanford, 44, of San Ramon, California, to 30 months in prison, to be followed by three years of supervised release, for a mortgage fraud scheme, U.S. Attorney Benjamin B. Wagner announced. On September 19, 2012, following a seven-day trial, a jury found Blanford guilty of six counts of mail fraud.
This case was the product of an investigation by the FBI and the
Internal Revenue Service-Criminal Investigation (IRS-CI). Assistant U.S.
Attorneys Paul A. Hemesath and Michael M. Beckwith prosecuted the case.
According to evidence presented at trial, from approximately April
2003 through October 2005, Blanford, while working as a senior sales
representative for Long Beach Mortgage, a wholesale subprime lender and
former subsidiary of Washington Mutual Inc., participated in a scheme to
defraud his employer. Blanford earned compensation based on the volume
of loans processed by Long Beach Mortgage. The evidence established that
he paid a loan coordinator in cash and checks to falsify documents,
provide false verification of borrowers’ employment or professional
licensing status and turn a blind eye to fraudulent representations
contained in loan applications and other documents submitted to Long
In each of the years 2003, 2004, and 2005, before taxes and payroll
deductions, Blanford received more than $1 million in commissions and
other compensation from Long Beach Mortgage as a result of his scheme.
Between April 2003 and October 2005, he paid the loan coordinator more
than $50,000 in checks alone.
U.S. Attorney Wagner stated, “This investigation exposed a
sophisticated chain of fraud that started at the homebuyer level and
extended all the way to banking insiders. It is a lesson that those
earning million-dollar paychecks are not exempt from significant