When Scott Almeida walked out of federal prison and into the mortgage business, he took a gamble. He admitted on his license application that he had been convicted of cocaine trafficking.
Florida regulators -- responsible for protecting borrowers from predatory brokers -- could have rejected him on the spot.
Instead, they asked for a character reference: He gave them a note from his mom. They said he needed a reputable supervisor for his practice: He chose a guy he met in the prison visitor room.
They asked for a copy of the court file but never demanded the police report, which shows that he had been caught with a small arsenal of assault rifles and ammunition, in addition to the cocaine.
Their background investigation complete, regulators circled ''approved'' at the bottom of the screening checklist, collected a $215 license fee and looked the other way.
Over the next three years, in a crime spree that stretched from Tampa to Miami, Almeida arranged nearly $3 million in fraudulent loans and fleeced 30 people -- many of them elderly and disabled.
Twice, the Florida Office of Financial Regulation -- which polices the mortgage industry -- failed to act on warnings that Almeida was stealing from clients, allowing his scam to thrive until police threw him into jail.
The Almeida case highlights one in a series of breakdowns in the state's enforcement system created to protect borrowers. Since 2000, regulators failed to weed out people with criminal histories, monitor scam operations and discipline crooked brokers, a Miami Herald investigation found.
State regulators allowed thousands of ex-convicts to enter a profession that gave them access to the most sensitive and personal financial information: credit cards, bank accounts and Social Security numbers.
Those criminals went on to commit nearly $85 million in mortgage fraud, the newspaper found. They stole their customers' identities. They stole their money. They even stole their homes.
''I was disgusted, I had to cry, because it was the first time in my life I'd been scammed,'' said Mary Taylor, 62, one of Almeida's victims.
Beyond the licensing, regulators routinely overlooked or ignored complaints, allowing rogue brokers to flourish amid one of the biggest housing booms in state history.
As the median home price reached an all-time record in Florida, and the Miami skyline erupted with gleaming new residential towers, fortune seekers rushed into the mortgage business in unprecedented numbers.
But Florida regulators, who introduced the nation's first licensing requirement for mortgage brokers in 1959, failed to keep pace.
During an eight-month investigation, The Miami Herald analyzed computer records for more than 222,844 Florida mortgage professionals, examined thousands of records from the Office of Financial Regulation, reviewed hundreds of court files and interviewed dozens of regulators, brokers and victims.
The newspaper found:
From 2000 to 2007, regulators allowed at least 10,529 people with criminal records to work in the mortgage profession. Of those, 4,065 cleared background checks after committing crimes that state law specifically requires regulators to screen, including fraud, bank robbery, racketeering and extortion.
More than half the people who wrote mortgages in Florida during that period were not subject to any criminal background check. Despite repeated pleas from industry leaders to screen them, Florida regulators have refused.