- The conversation is with a con man named Matthew Cox who served 13 years in prison for various fraud charges
- He committed his first fraudulent act as a mortgage broker by falsifying a borrower's late rent payment
- His manager, Gretchen Zayas, instructed him to commit the fraud and assured him he wouldn't go to jail
- Cox was 29 years old at the time and had tried various career paths before becoming a mortgage broker
- He describes the sales and negotiation aspects of the mortgage industry, particularly in the subprime lending sector.

- The speaker discusses unethical practices in the subprime mortgage industry, such as raising purchase prices and falsifying financial documents
- He admits to committing fraud by changing W-2 forms and pay stubs to help borrowers qualify for loans
- He explains how he made money through broker fees and yield spread
- He also discusses creating fake identities to manipulate credit profiles and the complicity of lending institutions in these practices

- The speaker discusses how they detected fraud in W-2s and credit applications
- They share a story of a woman with perfect credit who used her child's social security number to build credit
- The speaker then explains how they obtained fake social security numbers and birth certificates for fraudulent purposes

- The speaker discusses how he used synthetic identities to obtain driver's licenses and create fake credit profiles
- He leveraged these identities to obtain secured credit cards and build credit history
- Eventually, he used the synthetic identities to flip properties and make a profit
- He manipulated appraisals by recording higher sale values for the properties than what he actually paid

- The speaker describes how he manipulated the appraisal process to obtain loans for properties he had invested $60,000 in but were appraised for $200,000
- He used synthetic identities to secure loans and then defaulted on them
- He fabricated stories of accidents and comas to avoid foreclosure on the properties
- The scam involved multiple people and resulted in the manipulation of the housing market for 109 houses

- The speaker was involved in a fraudulent mortgage company and created a fake bank to commit mortgage fraud.
- The speaker's friend and former employee also committed mortgage fraud and was investigated by the FBI.
- The friend wore a wire and informed the FBI about the speaker's fraudulent activities.
- The speaker's wife was also involved in the fraudulent mortgage loans.
- The speaker tried to devise a plan to protect his wife and himself from getting in trouble with the FBI.

- The speaker was involved in fraudulent activities and was approached by the FBI
- He initially refused to cooperate and sought legal counsel
- Eventually, he realized the importance of cooperation and the lack of loyalty among criminals
- He observed that the majority of people involved in criminal activities will cooperate with authorities to save themselves
- He learned that expecting loyalty from criminals is unrealistic and that cooperation is common, even when facing minimal consequences
- The speaker ultimately regrets not cooperating earlier and acknowledges the lack of loyalty in the criminal world

- Matthew Cox, a former con man, discusses his involvement in fraudulent activities in the subprime mortgage industry
- He admits to falsifying financial documents and creating fake identities to manipulate credit profiles
- Cox manipulated appraisals and secured loans using synthetic identities, resulting in the manipulation of the housing market for 109 houses
- He was approached by the FBI and initially refused to cooperate, but eventually realized the lack of loyalty among criminals and regrets not cooperating earlier

- The speaker discusses the prevalence of snitching and cooperation among criminals
- He reflects on the lack of integrity and moral code among criminals
- He admits to committing fraud out of desperation and narcissism
- He acknowledges the harm he caused to others and the consequences of his actions
- He talks about being caught and the repercussions, including losing everything in a divorce

- The speaker started flipping houses to make money and avoid moving back in with his parents
- He used synthetic identities to secure loans and sell renovated houses
- He created fake banks and used different voices to deceive lenders
- The motivation behind his actions was to gain his father's approval and avoid disappointment

- The speaker discusses his fraudulent real estate practices, including using synthetic identities to buy and refinance properties
- He describes using a mug shot from an arrest website to create fake IDs for the synthetic identities
- The speaker convinces a handyman to pose as one of the synthetic identities for a closing in exchange for $500, and later $1000

- The speaker admits to running up credit cards and closing accounts without paying
- They also admit to manipulating appraisals and using fake licenses
- The speaker discusses getting caught in a fraudulent property deal and attempting to pay back the money to avoid foreclosure

- The speaker admits to committing various fraudulent activities involving real estate and mortgage loans
- They were able to avoid legal action by convincing the parties involved to accept repayment and not involve law enforcement
- The speaker also discusses other fraudulent activities involving creating fake identities and manipulating loans
- They acknowledge the prevalence of fraud in the real estate and banking industry, and the challenges of balancing regulations with access to loans
- The speaker admits to being on probation and continuing to engage in large-scale scams

- The speaker's girlfriend wanted to run a scam involving stealing a real person's identity
- They opened bank accounts and rented property using the stolen identity
- They attempted to cash a fraudulent check, but were caught at the second closing
- The girlfriend's friend, Travis, was also involved in a separate scam
- Travis was arrested and cooperated with the authorities
- The speaker helped get Travis out of jail and provided him with a lawyer

The speaker discusses the prevalence of snitching and cooperation among criminals, admitting to committing fraud out of desperation and narcissism. They describe fraudulent real estate practices, using synthetic identities, fake banks, and manipulation of loans. The speaker admits to being on probation and continuing to engage in large-scale scams, and helping a friend involved in a separate scam.

- The speaker was involved in a real estate scam with a friend who was actually working with a task force
- The task force was investigating multiple properties and the speaker's name came up
- The speaker's friend warned him that the FBI was going to arrest him
- The speaker tried to leave town with cash and his girlfriend begged to come with him
- The girlfriend revealed that she had moved to the area to work for a law firm connected to a casino company

- A woman working for a law firm embezzled money from her boss due to a gambling habit
- Her boss banished her to St. Pete and her son came to live with her
- She got plastic surgery and assumed a new identity in Atlanta
- She stole a man's identity and satisfied his mortgage without his knowledge

- The speaker admits to stealing people's identities and using them to fill out fake federal survey forms
- He targeted homeless people because they have social security numbers and other personal information
- He acknowledges the difficulties faced by homeless individuals and the lack of effective solutions for their problems
- The speaker rationalizes his actions by stating that the homeless individuals seemed happy to receive money for answering the survey

- The speaker discusses how they obtained personal information from surveys and used it to create multiple identities
- They obtained driver's licenses and passports in different states using the fake identities
- They also opened bank accounts and obtained secured credit cards in the fake names
- They used the fake identities to secure loans and make large amounts of money, and traveled to different locations for scams
- The speaker's partner was unhelpful and caused trouble with their behavior, leading to concerns about being caught by law enforcement.

- The speaker and Becky are still trying to gather money for their scheme
- They open multiple bank accounts and cash checks against them to get small amounts of money
- They encounter suspicion from a bank when trying to cash a large check and the Secret Service gets involved
- The speaker and Becky move to Charlotte, North Carolina and plan to run a scam in South Carolina, with a trip to Las Vegas in between

- The speaker goes to Las Vegas to drop off money and ends up taking surveys for the Salvation Army to determine homeless facility placement
- He buys two houses in South Carolina through owner financing and refinances them multiple times, borrowing a total of $1.3 million
- He opens multiple bank accounts using different identities and creates a corporation to open corporate bank accounts
- The speaker is organized and keeps track of each identity with its own file and plastic inlays for passports
- He receives a phone call from a lawyer regarding an issue with Washington Mutual

Speaker involved in real estate scam with friend working with task force
FBI warning leads to attempt to leave town with girlfriend
Girlfriend reveals involvement with law firm connected to casino company
Woman at law firm embezzles money due to gambling habit
Woman assumes new identity in Atlanta, steals man's identity
Speaker admits to stealing identities for federal survey forms
Targets homeless people for personal information
Rationalizes actions by claiming homeless individuals seemed happy to receive money
Obtains multiple identities, driver's licenses, passports, and bank accounts
Travels to different locations for scams
Encounters suspicion from bank and Secret Service involvement
Moves to Charlotte, plans scam in South Carolina, and takes surveys for Salvation Army in Las Vegas
Buys houses in South Carolina, opens multiple bank accounts and creates a corporation
Receives phone call from lawyer regarding issue with Washington Mutual.

- The speaker, a lawyer, was contacted by Washington Mutual about a fraudulent document showing multiple mortgages on a property he had refinanced.
- He met with his corporate lawyer and a criminal defense attorney to address the issue.
- The speaker ultimately paid off Washington Mutual to avoid involving law enforcement.
- He also had a close call with law enforcement officers at Wachovia, but was able to convince a detective that his actions were legal.

- The speaker went to Wachovia to get a first mortgage and was only approved for $100,000 due to Fannie Mae guidelines
- He was then referred to a friend of a loan officer who got him a second mortgage and an equity line of credit
- He was mistaken for someone else with a fake ID and was briefly detained by the police
- His wife refused to help him and he was advised by the police not to leave town
- He had been involved in a scam to withdraw large sums of money from bank accounts and had relocated to Texas when the scam fell apart

- The speaker owns 2 houses and refuses to leave despite being warned by a friend
- He leaves and drives to multiple banks to withdraw money
- He encounters suspicion at a bank and returns to Charlotte to pack up his apartment
- He drives to Houston with his belongings and stays with a woman named Becky
- He has a confrontation with Becky and leaves with $100,000
- He calls his mother and a former colleague, and is advised to turn himself in to the FBI
- He speaks with an FBI agent named Candace, but refuses to turn himself in

- The speaker was being tracked by US Marshals and had to flee from them
- He used a burner phone and fake business cards to try to establish a new identity
- He narrowly escaped being caught by the marshals
- He eventually found a townhouse to rent using a fake identity

- The speaker used a fake identity to rent a house and get a driver's license
- He then started buying and renovating houses using fraudulent methods
- He met a girl named Amanda, who eventually found out about his real identity and illegal activities
- Despite this, they continued their relationship and engaged in various financial activities together
- The speaker emphasized the importance of not getting caught and maintaining a false identity

- The speaker was involved in buying, renovating, and building houses, and opened a corporation and bank account in their partner's name
- They were also in a relationship with another woman named Trina and were on the run from the law for mortgage fraud
- They were caught and arrested after their partner, Amanda, called the Secret Service and they were watched for 3 days before being arrested
- They planned to flee the country to Australia but were arrested before they could leave

- Lawyer contacted by Washington Mutual about fraudulent mortgages on property
- Paid off Washington Mutual to avoid law enforcement involvement
- Mistaken for someone else with fake ID, detained by police
- Involved in scam to withdraw money, advised not to leave town
- Fled from US Marshals, established new identity, engaged in illegal activities
- Caught and arrested after partner called Secret Service, planned to flee to Australia but arrested before leaving country

- The speaker discusses being seen as a bad guy and feeling betrayed by a friend
- They were arrested and faced multiple charges, including fraud and money laundering
- Their lawyer advised them to cooperate and hope for a reduced sentence
- Other co-conspirators had already cooperated and been sentenced to prison

- The speaker was sentenced to 40 months in prison, reduced from 70, for cooperating with authorities
- They had interactions with both the Secret Service and the FBI
- They discussed bribing a politician to get their lots zoned for multi-family use
- The FBI questioned them for several days and brought documents to review
- The speaker felt that the Secret Service was more professional and personal in their interactions

- The speaker was indicted for bribery but not on their own case
- They were sentenced to 26 years in prison
- Despite cooperating with the government and being interviewed by Dateline, their sentence was not reduced
- They were moved to a medium security prison where they witnessed violence
- They were initially locked up in a county jail

- The speaker was in a county jail with federal inmates, and felt it was like a prison.
- He wanted to go to prison because it seemed better than jail.
- He was eventually transferred to a prison where he taught real estate classes and GED courses.
- He had more problems at the low-security prison than at the medium-security one.
- He was put in solitary confinement for his own protection after an article was published about his FBI interview.

- The speaker was threatened by a prison gang leader named Bubba, but stood up to him and continued walking the yard
- The speaker was questioned by the FBI about a case involving 12 indicted individuals, but the case was eventually dropped
- The speaker wrote a memoir and helped another inmate write his book
- The speaker felt defeated and settled into prison life

- The speaker had written a manuscript before going to prison, influenced by John Grisham books
- He meets a fellow inmate, Frank Amadeo, who is a lawyer with mental health issues
- Frank helps the speaker file a motion to reduce his sentence, which eventually leads to a reduction in his sentence

- Speaker faces multiple charges and is advised to cooperate with authorities
- Sentenced to 40 months in prison for bribery and other charges
- Interacts with Secret Service and FBI, experiences violence in prison
- Sentenced to 26 years despite cooperation and media interviews
- Eventually helps another inmate file a motion to reduce his sentence

- The speaker meets with a lawyer who tells him he doesn't have much of a chance for a reduced sentence
- The lawyer is surprised to learn that an inmate, named Frank, did the legal work for the speaker
- The speaker is initially offered a one-level reduction, but Frank advises him to argue for more
- The speaker eventually gets a 3-level reduction, bringing his sentence down to 7 years
- The speaker continues writing and gets a book deal while in prison
- The speaker meets another inmate, Ron, who is concerned about his sentence reduction because he hid money from a Ponzi scheme
- Ron confides in the speaker that he gave money to his wife and is worried she will turn it in to prevent his sentence reduction

- The speaker cooperates with the Secret Service to help catch a criminal
- The criminal's wife and brother give up half a million dollars in cash and silver
- The criminal pleads guilty and gets 6 months added to his sentence
- The speaker is waiting for a sentence reduction but receives no response from the prosecutor

- The speaker explains how his lawyer, Frank, filed a 2255 and appealed to get his sentence reduced.
- The prosecution initially denies any cooperation but eventually agrees to a 3-level reduction in the sentence.
- The speaker is grateful to Frank for getting 12 years off his sentence and feels guilty leaving his friends in prison.

- The speaker was given $400 by a friend before leaving a halfway house
- He was hired at a gym and received support from friends to start a website and podcast
- He was eventually invited to speak on a podcast, which led to other speaking engagements
- He also discussed his father's reaction to his legal troubles and imprisonment

- The speaker reflects on his time in prison and his relationship with his parents
- He regrets his past decisions and wishes he had lived a more conventional life
- He acknowledges his mistakes and expresses remorse for the impact on his son
- He advises young people to work hard and be appreciative, based on his own experiences

- The speaker is crying as he drives away from prison, missing his friends.
- He met his wife in the halfway house after she had served time for a meth conspiracy.
- They now enjoy hunting alligators together in Florida.
- The speaker's wife is a former military police officer and now works as a marine mechanic.
- Despite initial resistance, the speaker eventually won his wife over with his charisma.
- The conversation ends with a quote from Mario Puzo, author of The Godfather, and a thank you to the guest for sharing his story.

The speaker meets with a lawyer who initially offers a one-level sentence reduction, but with the help of an inmate named Frank, he eventually gets a 3-level reduction. He cooperates with the Secret Service to catch a criminal, leading to a reduction in his sentence. After leaving prison, he finds support from friends and starts a website and podcast. He reflects on his past decisions, regrets, and advises young people to work hard. He meets his wife in a halfway house, and they now enjoy hunting alligators together in Florida.

Matthew Cox is a former con man who served 13 years in federal prison for bank fraud, mortgage fraud, and identity theft. He is the author of many books, including his memoir Shark in the Housing Pool, and runs the YouTube channel @InsideTrueCrime 

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TRANSCRIPT:
https://lexfridman.com/matthew-cox-transcript

EPISODE LINKS:
Matthew's YouTube: https://youtube.com/@InsideTrueCrime
Matthew's Instagram: https://instagram.com/insidetruecrime
Matthew's Art Instagram: https://instagram.com/coxpopart
Matthew's TikTok: https://tiktok.com/@matthewcoxtruecrime
Shark in the Housing Pool (book): https://amzn.to/3S52EEy

PODCAST INFO:
Podcast website: https://lexfridman.com/podcast
Apple Podcasts: https://apple.co/2lwqZIr
Spotify: https://spoti.fi/2nEwCF8
RSS: https://lexfridman.com/feed/podcast/
Full episodes playlist: https://www.youtube.com/playlist?list=PLrAXtmErZgOdP_8GztsuKi9nrraNbKKp4
Clips playlist: https://www.youtube.com/playlist?list=PLrAXtmErZgOeciFP3CBCIEElOJeitOr41

OUTLINE:
0:00 - Introduction
1:59 - Mortgage fraud
16:47 - Creating fake people
50:33 - Arrested by FBI
1:07:24 - Omerta: Code of silence
1:29:41 - Fake ID's
1:59:03 - Getting caught
2:12:28 - Going on the run from FBI
2:24:09 - Identity theft
2:44:49 - More scams
2:56:38 - FBI Most Wanted
2:59:06 - Close calls
3:30:01 - Break up with Becky
3:34:42 - Calling parents
3:36:41 - Calling FBI
3:42:21 - Running from cops
4:04:11 - Getting arrested
4:19:36 - Snitching
4:35:51 - Prison
4:53:23 - War dogs
5:00:05 - Frank Amodeo
5:35:37 - Freedom
5:46:31 - Family
5:52:34 - Regret

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She found like $40,000 in cash in my freezer 1 night.

So we have this conversation and I tell her, look, people are looking for me.

Law enforcement which ones all of them, you know, she's like that doesn't even wait for what I go Mostly bank fraud and she's like well, how are they not finding you I Mean everybody, you know people know you like, you know Your general contractor which I met 4 months before this guy 6 months before there were 2 months before, you know She's like so-and-so so-and-so so and I'm like right right.

Well, I said well she's like, I mean, they've got your name.

They've got your, I go, well, that's identity theft.

I said, well, my name's not you know, my name is not it's not Joseph Carter And what is your what is your name?

I go look, you know, it's it's you don't need don't even worry about it

The following is a conversation with Matthew Cox, a con man recently released from federal prison where he served 13 years for bank fraud, mortgage fraud, identity theft, passport fraud, and other charges.

He has written true crime stories of many of his fellow prisoners, and now he continues this work by interviewing criminals about their crimes on his YouTube channel that I recommend called Inside True Crime.

Exploring the mind of a criminal is exploring human nature at the extremes, often in its most raw and illuminating form.

And that is something I definitely want to do with this podcast, to understand the human mind and everything it is capable of.

To support it, please check out our sponsors in the description.

And now, dear friends, here's Matthew Cox.

A mortgage is me borrowing money from a bank to buy a house.

How can you find a way to commit crime in this?

It's very difficult for the average guy to commit fraud because there's so many safeguards set up.

You know, if you were to go in and say, I make $300,000 a year, okay, well, we want your W-2s, we want your pay stubs, we're gonna call your employer, we're gonna check to make sure your employer, how long they've been incorporated.

We're going to check to make sure they're registered.

We're going to it's like your whole plan fell apart, you know, because the average guy can't do that.

He can't even come up with the with the pace of the W2.

So the average person, you know, or I'm going to put down this much money, but you're gonna borrow that money from the seller.

Okay, well, then they start asking for bank statements.

Like you can't even have it put in your bank for a day, get a letter, it's gotta have been there for 90 days or 60 days, depending on the bank.

And so there's all these ways for the average person, it's very difficult to commit fraud.

The average guy that works at Walmart and makes $60,000 a year, and he's been there for 5 years, and he saved his deposit, like it's a very, that's really the guy that those transactions are set up for.

To borrow a mortgage from Bank of America, that's the guy they're looking for.

So to commit fraud in this space, you have to misrepresent some aspect of your identity, of how much you're worth, how much money you have, this kind of stuff.

Anytime you lie to the bank, you've committed fraud.

And it's funny, when I was doing it, I would say, ah, it's in the gray area.

You're either lying in some capacity or you're not.

So, for instance the very first loan I did I whited out my borrower had been 30 days late on her on a rent.

So they're really looking at the last 2 years.

So when you go in the bank and most of what they're asking is a 2 year window.

They're saying, how long have you been on their job?

And how long have you been at your residency?

Now you could be at 3 places in 2 years, that's fine, as long as you consistently paid for 2 years.

Well she had been in an apartment complex but she'd been 30 days late.

The bank doesn't want to lend you money if you've been 30 days late.

So I was a broker and I whited out the 30 day late.

And my manager is the person that told me to do it.

So that was the first fraudulent action you committed.

I always say, oh, I sweated bullets for 4 or 5 days.

And I don't know that I was concerned that I had broken the law.

I was concerned because I was behind on my truck payment, I was behind on my mortgage, like I had banked on being a mortgage broker and I'd gone deep, deep behind on all my bills to do this.

So at the last minute when this loan isn't gonna close, and I have to commit fraud to make that happen.

And the idea, my fear was, they were gonna figure it out and maybe I'd get fired.

I didn't think I was gonna go to jail because my manager assured me, you're not going to jail.

So my concern was they were gonna catch it and I'd get fired and I wouldn't get paid.

what is funny, because I don't think I ever really mentioned this, her name was Gretchen Zayas.

She eventually, I don't mind saying it, but she eventually got ended up going to jail for fraud.

Her name was Gretchen Zayas and she was a manager.

I was working for a company called Eagle Lending and it was in Tampa.

So my very first deal, 3 or 4 weeks into it, into that first month and I walk in, I put the file in front of my manager, she looks through everything, oh, great, good, good, and put this 1 piece of paper over here and sat there.

And then when she was done, I said, what's going on?

She goes, but your borrower's 30 days late on her rent.

And I was like, oh my gosh, what do I do?

And I remember she pulled out a thing, a whiteout.

Not the sticks, but the 1, shh, shh, shh.

And she started going, shh, shh, shh, shh, shh, shh.

She goes, if I was you, and she handed, she said, I'd white it out, make a copy, stick it back in the file.

And she goes, and She was like, they're never gonna catch it.

If underwriting catches it, then they'll fire you.

That's it, Nobody's calling, you're not going to jail.

And so I did what she said, I stuck it in the file, and I mean, like I said, for 4 or 5 days, I was like, oh my God, I'm so scared.

Like I had gone to college and so many things had not worked out.

There's not a lot of people looking for anyone with a fine arts degree.

And I tried to be an insurance adjuster, tried that for about a year, year and a half, that didn't work out.

Ended up working construction for a few years.

And so finally, the girl I was dating said, you gotta be a mortgage broker.

She had just started in the mortgage industry.

And I was like, cause I was like, you know, I barely balanced my checkbook.

Like, I don't know anything about numbers.

She's like, it has nothing to do with that.

You're, you know, you're a natural sales salesman.

And I figured I'd, I need to try something.

So what aspect of mortgages is sales and deal making?

What aspects require the charisma that you clearly have?

Well, 1, you've got, you have clients that have lots of options.

They can go to Bank of America, they can go to SunTrust, they can go to Chase.

They have options, if they have perfect credit.

I ended up working for a company that was a subprime lender, And those people didn't have a lot of options.

By the time, honestly, by the time they got to that, to Eagle Lending, their options were over.

So what ends up happening is you're negotiating with sellers.

You would think that a lot of the stuff that in that industry that real estate agents should do, the brokers end up doing.

Because real estate agents are used to you meet them at the house, or they take you to several houses, they open the door, they walk around, they write up a contract that's legit, a legit contract, and you're already pre-approved, everything works out.

You got borrowers with horrific job history, they don't have enough of the down payment, they can't, maybe they have the down payment, but they don't have the closing costs, so you have to go to the real estate agent and say, listen, I need you to raise the purchase price and have the seller pay the closing costs, which is legal, but that's not, to a degree, but that's not how they wrote up the contract.

So now you're having to get them to rewrite the contract.

Or you're having, you know, there's little things you're trying to do.

And the more deals you get done and the more you deal with certain real estate agents, the more you start to realize that they're, you know which ones are completely above board and which ones are willing to twist the rules.

And a lot of it works on personal relationships.

For some reason, people tend to like me and trust me.

It hasn't worked out for so many people, but people naturally seem to trust me.

And so if I say, hey, I can close the loan, but you gotta do this, it'll be cool.

And you know, I've been doing this for years, and they go, oh, okay, and then they raise the purchase price, they add some money, they have the seller of the house give the borrower some money, they stick it in the bank, or they put it in an escrow at the closing company, like now you're starting to massage deals.

What was the second time you committed a crime?

So what, how did it start to evolve from the white out?

Well, I mean, when that went through, you know, I, I think a normal person probably would have said, wow, it was a one-time thing, got away with it.

Like I just got a check for like, I don't know what it was, 25, $3,500.

And by that time I was already working on another deal.

But that guy, he made, I forget, something like, he'd made like, let's say $45,000 the year before in his W-2.

If you based on his based on his current track record or his year-to-date of his pay stub he made a just enough money.

But if you factored in last year's W-2, he was shy.

So if I change that 45,000 to 51,000, then he could, the loan closes.

I get a check for 3,500 bucks, he gets into a house, I'm doing him a favor, you know, I'm doing God's work.

So I fix it, I kick back, I'm terrified a little bit, you know, worried about it.

4 or 5 days later, they call me, he's ready to close.

Next guy that comes in, I mean, I got very, very quickly, I was concerned, do you have a house?

Now, if you were in bankruptcy or something, there's some things you just, you'd pull their credit and you just couldn't help them if they were, if they had a 550 credit score or something and no job.

I mean, you know, they had to be within reason, but very quickly it was changing W-2s, changing pay subs, changing appraisals, you know, fixing, like I said, verification of the rent.

People that have been really struggling financially in life.

So you've been telling yourself that this is, you're doing a good thing for people.

I told myself that right up until that those loans were solid and I was helping those people out, right up until I went to prison.

And I was in prison and I had to write, the government asked me to write an ethics and fraud course to help teach the nation's mortgage brokers.

You know, all loan officers and brokers have to take, I think it's 9 hours of continuing education every single year.

And I was approached to write the ethics course.

And it was about that time, and about the same period of time I was writing my book.

And that kind of, I started reflecting on what I had done.

You know, the truth is like, And this is a horrible thing to say, because the first time I ever heard somebody say this, I remember thinking, oh, that's a horrible thing to say.

And there were many occasions where I put someone in a house that they 100% swore they could afford, it was, I was helping them, I told myself I was helping them, and a year and a half later, they're going into foreclosure, their stuff's on the corner, they don't know where to go.

And the truth is is that I'm not smarter than the actuaries that came up with those underwriting guidelines.

So in this whole process, how are you making money?

So yield spread is, let's say the interest rate is 8% interest.

If I charge them 25 basis points over the 8%, so I charge them 8 1⁄4, you know, 8.25, then I get 1% of the loan back as a fee.

So if I charge them 8.5%, I get 2 points back.

So if it's $100,000 piece of property, and the bank says your interest rate is gonna be 8% and I tell you 8.5 and I'm charging you a $3,500 broker fee, now I'm making $5,500.

So on even a $100,000 loan, you could make a nice chunk of change.

You said that there really isn't when you're lying or not, but it feels like there is.

Well every time I change something it wasn't gray area.

At this level you either meet the guidelines or someone has massaged it in such a way that they've committed fraud.

And there's tons of ways where you can commit fraud and they just can't figure it out.

Like, I mean, you've committed fraud and it's like they look at the entire, they look at all the documents and they double check everything and they know there's fraud in here, they just can't find it.

But just because they can't find it doesn't mean it's not fraud.

As part of this, you did a lot of fascinating things.

1 of the things you did, you talked about creating synthetic people, meaning creating fake identities.

So your credit profile is made up of your name, date of birth, your address, and your social security number.

And those are the kind of, and then there's other things, where you work, that sort of thing.

But what people don't realize is there's so many people out there that think that the credit bureaus already know who you are, right?

But the truth is the first time the credit bureau has ever heard about you was when you told them.

The first time you applied for a credit card they created a credit profile at that moment.

So the first time you apply, you give them your full name, date of birth, social security number, and your address.

And they create a credit profile, and they say, hey, no record found of this person.

He has no credit, nothing, probably got denied.

Well, what I realized through the course of, because eventually I end up leaving that 1 company and I open my own mortgage company.

When I opened that mortgage company, I was on the inside, does that make sense?

Like I wasn't just a broker that was sitting out with everybody else and would periodically come in and ask questions or would call underwriting but really didn't understand what was happening and exactly what the underwriting guidelines were.

Now I was actually talking to the underwriters and you're talking to the owners of the lending institutions and the banks and you're talking to all of the account executives and now it wasn't just Eagle lending I was talking to there were 40 different account executives coming in on a weekly basis trying to get us to sign up with their lender And they're on the inside telling you, coming in, showing you programs and saying, look, if your borrower is self-employed, we don't ask for this or this, we just ask for them to say they're self-employed, like liar loans.

No doc loans where they don't ask for any documentation.

If he's got over like let's say a 700 credit score and he says he's been a plumber and he works for himself, then he's got over a 700 credit score.

He just has to say he's worked for himself for over 2 years and-

He's got the money in the bank, he's got a 700 credit score, says he's been on the job for 2 years, he's self-employed, we're gonna raise his interest rate by 1%.

So, but you start to know how things work because I hired a bunch of brokers to work underneath me and when they would get caught, I would get the phone call.

So I get the phone call from the owner of a bank or a lending institute, you know, a lender, and that lender says, hey Matt, we got a problem.

He's like, it's like, listen, we caught a fake W-2.

Yeah, your broker so-and-so sent us a file and this person had, there's 2 fake W-2s and we're assuming the pay subs are fake.

And they go, oh, well, here's what we did.

We checked with Sunbiz.com, you know, sunbiz.gov, which is the Secretary of State's website that registers corporations, and we checked and the tax ID number didn't match.

And now I know every W-2 has to have a matching tax ID number for whatever corporation issued it.

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Matthew Cox: FBI Most Wanted Con Man - $55 Million in Bank Fraud | Lex Fridman Podcast #409