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Christopher J. Warren of WTL Financial, who had nearly $1-billion in mortgage backed securities based on fraudulent mortgages originate from his company, captured by police after being fugitive.

by JOE FRIESEN - Globe and Mail

February 13, 2009 - He describes himself as one of the predatory lenders and mortgage fraudsters responsible for the evisceration of the once-mighty U.S. economy, and this week Christopher J. Warren, a fugitive from justice bearing a false passport, stepped onto Canadian soil carrying $70,000 in cash hidden in his boots, four ounces of platinum, and certificates attesting to the purity of $1.1-million in gold.

An FBI manhunt had tracked Mr. Warren across the world ever since he fled the U.S. on Feb. 3, when he paid more than $150,000 in cash to hire a private jet in Las Vegas. The plane flew first to Ireland, and en route Mr. Warren, 27, allegedly flashed some of the $5-million in gold bricks he told the flight crew he was carrying. After refuelling, they flew to Lebanon, where an armed escort met Mr. Warren at the airport and took him to a luxury resort in Kaslik-Jounieh, where he stayed for five days.

In a catch-me-if-you-can scene, law enforcement raided Mr. Warren's hotel room in Lebanon only to find that he had slipped out ahead of them, leaving behind his clothes, fake ID and valuables.

He next popped up in Toronto, arriving at Pearson Airport on Tuesday night. He stepped into the Canadian winter night and hired a taxi with $300 in cash to take him to the U.S. border at Buffalo, N.Y. It was there that he tried to cross with a fake American passport and was arrested.

Russell Carlberg, assistant U.S. attorney in Sacramento, Calif., said Mr. Warren will be returned to California where he is charged in connection with a $100-million fraud and Ponzi scheme alleged to have taken place at Loomis Wealth Solutions, where he worked.

Mr. Warren had been co-operating with investigators for several months, which made his foreign sojourn even more difficult for authorities to understand. He had been seeking leniency in exchange for his co-operation but no deal had been struck, and one is now unlikely to be offered.

Before fleeing, Mr. Warren posted a lengthy mea culpa on a website he controlled in which he told the story of a life lived on the edge, and expressed regret for a number of transgressions, none of which has been proven in court.

His story begins at the age of 19 when he was hired by the Ameriquest Mortgage Company, and where he quickly became a "shining star," he wrote.

"My managers and handlers taught me the ins and outs of mortgage fraud, drugs, sex and money, money, and more money," he said. He alleges employees were routinely given crystal methamphetamine, an illegal and highly addictive stimulant, and encouraged to make false statements on loan applications to get them approved by lenders.

Mr. Warren wrote that by the time he was 22 he was directly responsible for funding $75-million in fraudulent mortgages.

He had personally profited by $2.25-million, bought 24 cars and a new house. He then founded his own company, WTL Financial, modelling it after the firm in the film Boiler Room. In three years nearly $1-billion in the now infamous financial instrument known as mortgage backed securities originated from his company.

"I helped ruin this nation's economy. Almost a billion dollars of toxic assets came from me, making others above me rich beyond my imagination. They asked for more and more, knowingly, and I gave it to them," he wrote.

Mr. Warren faces charges of bank fraud, mail fraud and running a continuing financial crime enterprise related to his time at Loomis.

"It was a three-tiered fraud scheme by which people's home equity and retirement accounts were drained and invested into a fund," the prosecutor, Mr. Carlberg, said. "That money was then supposed to be used to invest in sub-prime mortgages, when in fact investigation has shown the money was used to pay operating expenses and lavish salaries for employees."

Prosecutors could not say whether Mr. Warren had engaged in criminal activity overseas.

Wow, just goes to show you what a little bit of senseless greed can do. I can understand if someone decided to up the pace of business, but outright fraud? Well, prices are to be paid on that.

Sandy