Crime

Tondreau’s fate in mortgage fraud case to be decided soon

In May, North Miami Mayor Lucy Tondreau talks with the media outside the federal courthouse in Miami. Her trial on charges of mortgage fraud could end this week.
In May, North Miami Mayor Lucy Tondreau talks with the media outside the federal courthouse in Miami. Her trial on charges of mortgage fraud could end this week. MIAMI HERALD STAFF

Like many Haitian Americans in North Miami, Yvon Exius got to know future mayor Lucie Tondreau through her immigration work, political activism and radio shows.

Above all else, the garbage collector says, he “trusted” her.

So when Tondreau asked him to be the buyer for a couple of high-priced homes during the last real estate boom, Exius agreed to do it, even though he couldn't dream of affording them. He says that she, in turn, gave him $10,000 for each deal.

The fallout: “It has ruined not just my credit, but my life,” Exius testified last Thursday at Tondreau's mortgage fraud trial, which could end this week with a verdict.

Tondreau, 55, who was suspended from office after her arrest in May, has stood trial in Miami federal court since early December on charges of conspiring to commit wire fraud with her ex-business partner and fiancé, Karl Oreste, and two other defendants, who are fugitives. She is accused of plotting with Oreste to bamboozle banks into loaning them a total of $11million between 2005 and 2008.

If convicted, Tondreau, who was elected in 2013 as the mayor of North Miami, would permanently lose her seat and be subject to a potential prison sentence of up 30 years.

During the past week, the trial has had its moments of drama: A juror said she had been approached by a man who offered some kind of bribery payment. She reported the matter to U.S. District Judge Robert Scola, who conducted a brief inquiry. But it came to nothing, and no one sought a mistrial.

More significant, the prosecution decided not to call the trial’s potential star witness, Oreste, 57, who pleaded guilty in July and was expected to detail the 20 crooked real estate loan deals that he and Tondreau were accused of puttting together.

Prosecutors Lois Foster-Steers and Gera Peoples did not say why. But they may have had concerns about Oreste’s potential vulnerability on cross-examination. Tondreau’s defense team planned to portray him as the consummate con man who duped her into playing an unwitting supporting role to fleece the banks.

“Lucie was in love with this man,” defense attorney Michael Davis said at the start of trial. “She trusted this man, and he betrayed her trust.”

Tondreau and Oreste, who pleaded guilty before trial, were not only business partners but once engaged to be married. The couple co-hosted Creole-language radio talk shows that advertised loan services through his brokerage business, KMC Mortgage Corp.

And that’s one way they reeled in “straw” borrowers such as Exius to file bogus loan applications to buy a variety of South Florida homes during the last boom, Foster-Steers said during opening statements.

The future mayor and her business partner paid off the straw buyers, another recruiter and a title company attorney, but kept most of the loan proceeds to enrich themselves and keep the mortgage-fraud scheme alive, the prosecutor said.

At trial, Exius and seven other straw buyers testified that Tondreau talked them into buying homes without putting any money down. They only needed to sign the loan paperwork, and each received thousands of dollars in exchange.

In Exius’ case, he purchased two homes in June of 2006: the first for $510,000 on Frow Avenue in the Coconut Grove section of Miami, and the second for $1.2million on Coronado Drive in North Miami.

In both instances, the loan paperwork showed that he had an annual income of $29,215, that his employer was Right Choice Housing and that he paid some of the costs at the closings. None of that information was true, he testified.

“I have never earned that much money,” Exius testified through a Creole interpreter, adding that he could not qualify to buy either home nor did he intend to live at either address. Yet somehow, in a fast-and-loose real estate market soon to go bust, he qualified for two massive mortgages.

At one point, the prosecutor displayed a handwritten note that read: “I am purchasing this property as a primary residence.”

Asked if he signed the document, Exius answered no. “It’s not mine, and besides there’s a mistake in the spelling of my name.” Indeed, at the end of the note, his last was spelled “Exuis.”

Exius said he grew fearful that he would get arrested for buying the two homes, which were used as rental properties, until they went into foreclosure, he testified.

He recalled getting upset with Tondreau over using him for the transactions. “She said I had been given money and how dare I get upset with her,” Exius testified. “Those words killed me.”

On cross-examination, Davis, sought to portray him as a mixed-up witness, and it worked for a while. When asked about his personal life, Exius could not remember details about when he came to Miami from Haiti or how long he had been married or the ages of his children.

But Exius, who said that Tondreau introduced him to Oreste, stuck to his original testimony: “I found myself in a series of problems that I never thought would befall me. She didn’t tell me the whole truth.”

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