Regulators also routinely asked offenders for a written explanation of their crime and subsequent rehabilitation.

''I had to write a letter. It took three seconds. It wasn't a battle,'' Almeida told The Miami Herald. With that, the OFR issued his license.

When South Beach real-estate speculator Richard Crowder applied in January 2003, he explained that his prior burglary case was ''my only altercation with the law and something I will be forever ashamed of.''

The same month he wrote those words, court records show, Crowder embarked on one of the most ambitious mortgage-fraud schemes in recent Florida history, netting $37 million in fraudulent loans by systematically lying on mortgage applications, fabricating supporting documents and arranging bogus appraisals.

Crowder spent the money on luxury condos in gleaming new towers, which have become the very symbol of Miami's real-estate bubble.

His empire included 14 waterfront units -- with access to a rooftop pool and 24-hour concierge -- at the Continuum in South Beach, one of the most expensive addresses in the southeastern United States.

After Crowder pleaded guilty in January, he told The Miami Herald that he hoped for a light sentence so he could devote himself to teaching ''credit literacy seminars'' in area high schools. In April, U.S. District Judge Jose E. Martinez sentenced him to nine years in prison.

EVADING THE TRUTH

Dozens of applicants simply lied to get their licenses, The Miami Herald found.

Twenty-six with criminal records checked ''no'' to the question on whether they had ever been convicted of a crime involving fraud, dishonest dealing or moral turpitude. The OFR's background check -- which until recently searched only Florida police and court records -- uncovered convictions for eight of them.

But even when regulators caught applicants lying, they still granted licenses, despite a provision in state law that says any ''material misstatement of fact'' is, by itself, grounds for a denial.

In 2003, Kissimmee broker Donald Lewis Smith checked ''no'' to the crime question on his application. In fact, he had been sentenced to 17 years in prison for strangling his wife and dumping her body into Tampa Bay, court records show.

When their background check revealed that Smith had lied, it was too late to reject him.

Under state law, after regulators receive an application, they have 30 days to request more information, said OFR Bureau Chief Pam Epting. In Smith's case, they didn't get the results of the background check until the 30th day -- they missed their chance to ask him about the murder conviction.

''The agency ended up having to issue the license, and the reason for that is our own mistake,'' OFR lawyer Peter Fisher said.

So instead, they asked whether Smith would be willing to go on probation. He said no, records show.

The OFR gave him a license, no strings attached. Smith could not be reached for comment.

In other cases, applicants omitted their most serious offenses from the follow-up paperwork or shaded the facts in their own favor.

Almeida told regulators he had been convicted of ''possession with intent to distribute.'' They asked for certified copies of all court records pertaining to the case, but their file doesn't include a copy of the police report.

It shows that when police raided his Tampa apartment in 1998, they found the tools of a large-scale trafficker: two kilograms of cocaine, two semiautomatic assault rifles, a stolen Glock pistol, Ecstasy, steroids, syringes, sophisticated scales, and a mold for pressing cocaine into one-kilogram packages.

Regulators did not demand a copy of the report, a standard part of any criminal file. Instead, they asked Almeida to sign a probation agreement -- a promise not to own a brokerage or break any mortgage-industry law for five years.

PROBATION DEALS

Of the 4,065 mortgage brokers and lenders with criminal records who got licenses between 2000 and 2007, 269 applicants signed similar probation agreements, The Miami Herald found. Among them were 40 people convicted for assault or battery, 39 for grand theft, 23 for burglary and one for kidnapping.

But the state's probation does not require monitoring -- no mandatory reports, no visits from regulators.

''We do not have the personnel to go out and review their files,'' said Fisher, the OFR lawyer.

The system even allows convicts to choose their own probation supervisors.

In 2003, Almeida chose his boss, Frank Giffone, whom he had met in federal prison. Almeida was an inmate; Giffone was visiting a mutual friend, Almeida told The Miami Herald.

Shortly after going into business together, the pair sent salesmen to search out elderly, often disabled people living in ramshackle houses in poor neighborhoods of Hillsborough, Polk and Lee counties.

They promised home-equity loans for badly needed renovations.

State regulators received two written warnings in 2004 that Almeida was lying on the loan applications and stealing money. One was from the daughter of a 76-year-old victim, the other from investigators at the Hillsborough County Consumer Protection Agency.

But despite the fact that Almeida was on probation, and had promised not to break the law, regulators took no action against his license.

Almeida later pleaded guilty to stealing from both borrowers. Giffone pleaded guilty to racketeering.

After the warnings, Almeida went on to scam 12 more victims in deals involving $1.1 million in fraudulent loans, including several routed through a brokerage in Homestead, records show.

As the number of applicants rushing into the business peaked in the last three years, criminals with even longer and more troubling rap sheets got licensed, The Miami Herald found.

State regulators allowed Eric Goldstein into the industry early last year despite no-contest pleas to two counts of racketeering, conspiracy to traffic cocaine, and possession of a machine gun with the serial number filed off.

In his explanation of the 1997 racketeering charge, Goldstein told regulators he had been been running ''an adult entertainment establishment'' -- police called it an illegal escort service -- when an undercover cop offered to process credit-card payments for him.

Under the law, any of his convictions would have justified immediate denial of his license application. But the OFR ''has to ensure that we are considering the possibility of rehabilitation,'' said lawyer Peter Fisher.

In Goldstein's case, the agency noted that he got probation for the racketeering offense, and hadn't served jail time since the cocaine-trafficking and weapons charges in the early '90s, Fisher said.

Two months after the OFR granted his license, Goldstein was arrested again, for extorting money from a partner in a proposed real-estate deal. He pleaded guilty to a lesser charge of making harassing phone calls. ''In retrospect, I agree, our decision does look questionable,'' Fisher said.

Nevertheless, Goldstein still has an active license. He told The Miami Herald that he's not practicing, however, ''because of all the problems in the industry.''

FBI SCREENING

Sometimes state officials themselves broke the law.

In 2006, the year license applications and home-sale prices peaked, the Florida Legislature changed the law to close a significant gap.

The new provision required state officials to send would-be brokers' fingerprints to the FBI to screen for convictions in other states and in federal court, where serious financial crimes and drug-trafficking cases are often prosecuted.

But state officials didn't follow the law. Last February, more than a year after the statute was changed, Greg Oaks, chief of the OFR's Bureau of Regulatory Review, told The Miami Herald that running the FBI checks using the old-fashioned hard-copy fingerprint cards took too long.

''It's conceivable a person might have an FBI record and we wouldn't see it,'' Oaks said. The agency began to run FBI checks in March of this year, officials said.

Here's what the OFR missed:

• Miami broker Jack Lux checked ''no'' to the criminal-history question. In fact, he had pleaded guilty to conspiracy to commit money laundering and was sentenced to two years in federal prison, court records show. The OFR granted his license in February 2007.

• Nilsa Albaron, who had pleaded guilty to conspiracy to commit bank robbery, got her license in 2007, too. She checked ''yes'' to the criminal-history question, but wrote in her letter of explanation that prosecutors had dropped the charges.

Not true. Miami-Dade prosecutors dropped one charge, but transferred the bank-robbery case to federal court.

Albaron said she doesn't know how OFR administrators missed her federal judgment. ''Ask them,'' she said before walking away from two Miami Herald reporters.