When state regulators showed up at Samantha Johnson's mortgage company, she had already stolen her first house.

She had forged documents to fleece lenders. She had skimmed money off a customer's loan. She had lied to conceal 19 questionable mortgages.

Florida regulators caught all of that, but they didn't revoke her license or call for a criminal investigation.

Instead, they fined her $4,300 -- less than the commission on a single mortgage -- and made her promise to stop breaking the law.

Case closed.

Back on the prowl, Johnson went on to steal $2.5 million in loans and nine more homes -- including one from a recently widowed, disabled Vietnam veteran and another from a blind, 79-year old woman with Alzheimer's disease.

"It was devastating," said the woman's daughter, Janice Scott-Kittles. "I couldn't believe that somebody could do something like that."

Though agents for Florida's Office of Financial Regulation had the power to stop Johnson anytime, they didn't revoke her license until after a judge had thrown her in jail.

Time and again, regulators caught mortgage professionals breaking the law -- fraud, forgery, and stealing from clients -- but allowed them to stay in the business with few consequences during the richest housing boom in state history, The Miami Herald found.

In fact, as Florida's rate of mortgage fraud rose to the highest in the nation over the past eight years, the number of licenses revoked by state regulators declined each year -- a key measure of a regulatory agency's vigilance.

COMPLAINTS IGNORED

While Florida regulators failed to weed out former criminals entering the industry, the newspaper found the state's system for monitoring scam operations and disciplining crooked brokers also failed .

Complaints to the Office of Financial Regulation -- the state agency created to police the industry -- were routinely ignored, leaving consumers to fend for themselves, according to public records and interviews.

Among those dismissed: 10 complaints against a notorious Broward brokerage whose president eventually pled guilty to $21 million worth of mortgage fraud.

During an eight-month investigation, The Miami Herald analyzed more than 1,400 final orders issued by the agency between 2000 and 2007 and posted on the OFR website, reviewed quarterly reports the agency presented to the Florida cabinet and scrutinized the agency's annual industry newsletters.

The Herald also reviewed thousands of consumer complaints, court files and police reports.

FINDINGS

The newspaper found:

• One in three brokers the OFR dicovered committing fraud -- the most serious offense under state law -- were allowed to keep working in the industry with no monitoring.

• Eighty-one brokers were caught siphoning funds from clients' escrow accounts and gouging customers with excessive fees but were allowed to keep peddling loans.

• While the number of fraud cases soared this decade, regulators opened fewer examinations of brokers' books each year, greatly reducing the threat of state sanctions to fraud mills.

• Suspensions -- another tool to protect consumers -- were used so infrequently that for three years, they weren't imposed at all, records show.

• The most frequent reason brokers were booted out of the industry: bouncing checks for licensing fees to the OFR.

SWEEPING POWERS While the agency was reaping a windfall during the land boom -- licensing fees drove the OFR's bank balance from $2.7 million in 2000 to $29 million last year -- Florida's mortgage fraud rate was steadily rising.

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