At least 20 Florida mortgage brokers maintained their licenses even after committing the most obvious violation of public trust -- mortgage fraud.
Hundreds more kept their licenses after other serious crimes. A reputed mobster convicted of racketeering renewed his from prison, records show.
That's possible because, while some states run criminal background checks each time a broker renews a license, Florida does not.
Instead, the state relies on an honor system. Once regulators issue a license, they trust brokers to self-report future convictions and disciplinary actions taken by other regulatory agencies.
The brokers have 30 days to notify the Office of Financial Regulation, but the agency makes no effort to track compliance, The Miami Herald found.
Maria Caldwell, 39, pleaded guilty in 2003 to her part in an $876,000 scheme to falsify documents and coax loans from banks for phony buyers.
One $178,000 mortgage arranged by her group went to a jobless 17-year-old girl whose loan application said she worked at "Pebbles and Bam Bam, Inc., " court records show.
Caldwell was sentenced to four months in jail and four years of probation, but still has an active license.
Caldwell did not respond to several requests for comment for this report.
In 2001, FBI agents called OFR regulators with a tip: They were investigating Veronika Smith-Riley, who worked for a Miami brokerage, on suspicion of mortgage fraud.
Nevertheless, when she applied for a license, the OFR granted it in November of that year.
Three months later, in February 2002, Miami-Dade County police arrested Smith-Riley twice on the same day. First, it was for stealing a client's house -- she had filed a fraudulent quit-claim deed and transferred it to her own name, court records show.
Less than two hours later, they arrested her for grand theft. She had stolen a different mortgage client's identity, using his financial information to get a loan to finance a friend's breast implants.
Guilty in both cases, she was put on a year's probation.
In the fall of 2002, she applied to the OFR for a separate license to open her own mortgage brokerage business.
Internal OFR documents make no mention of her arrests for mortgage fraud and grand theft. But regulators raised two concerns: She was still under investigation by the FBI, and she bounced her $425 check for the licensing fee.
But when the check cleared, they granted the license, and Trinity Empire Mortgage Corp. was in business with Smith-Riley as president.
The man whose house she stole was stunned when he learned that the OFR had given her another license.
"How the hell can you do that if you just got convicted of fraud?" asked Kevin Thelwell, 37.
A year later, in the summer of 2004, Smith-Riley was arrested again. She had filed a fraudulent loan application for a man who was in prison, and masqueraded as a lawyer to steal the equity from foreclosed properties, court records show.
While awaiting trial, she maintained both licenses in good standing.
In 2005, the FBI acted on its own investigation, charging Smith-Riley with yet another case of mortgage fraud. She pleaded guilty and was sentenced to 11 months in prison. But she kept her licenses until June 2006, when the OFR finally revoked them.
Smith-Riley did not respond to a request for comment made through her lawyer.
OFR officials interviewed last week said they were not familiar with the details of Smith-Riley's case and could not explain why her licenses were finally revoked.
But when told that other states do a fresh background check before they renew a license, Terry Straub, director of the OFR's Division of Finance, turned to an agency lawyer and said, "The obvious question is why don't we?"
Joseph Rubbo, 44, had no criminal record when he got his broker's license in 1999.
Three years later, he pleaded guilty to running a Florida-based boiler room for one of New York's original Mafia families -- the Bonannos. His phone bank had sold residents $11.7 million worth of stock in a company that did not exist, according to the federal indictment.
That same year, the Securities and Exchange Commission issued a restraining order against another Rubbo venture, "Make it Reel" productions, which sought investors for a $90 million film starring Tom Cruise and Catherine Zeta-Jones. Neither actor ever heard of the movie, SEC investigators discovered.
There is no indication in Rubbo's OFR file that regulators found out about either case, although both scams made headlines in Florida's largest newspapers.
Regulators did catch Rubbo in one offense, however: He failed to pay his $150 license renewal on time.
On Jan. 13, 2004, Rubbo got a sharply worded, all-capitals notice from Tallahassee, warning him that it's "NOT LEGAL TO WORK AS A MORTGAGE BROKER WITH AN INACTIVE LICENSE."
Rubbo paid. Regulators renewed his license five days before he entered federal prison, records show. In September 2005, regulators renewed it again -- while Rubbo sat in prison.