The Price of $3.2 Million in Mortgage Fraud?

by Alex Stenback on January 15, 2008

Two years for one Jill Lehn, title closer and notorious facilitator of Mortgage Fraud, who penned the cautionary "Tips on How to Ruin Your Life" after she was caught doing stuff like this:

[F]rom 2004 to 2006, Lehn had worked as a loan closing agent or buyer in 60 deals with 10 lenders. She helped conceal fraudulent payments in excess of $3.2 million, personally receiving more than $444,000….the property buyers signed the loan documents knowing they overstated the price of the properties. Lehn sent sham documents to lenders concealing kickbacks to the buyers and others.

Are we the only one’s not impressed with the severity of this sentence?  It was reduced (from the 51-63 months recommended by Federal Sentencing guidelines) for "extensive" cooperation, but, so what?  When the FBI has you dead-to-rights, what choice to you really have?

It is hard to imagine a 24 month sentence having much deterrent effect for other fraudsters.  We’d like to see harsher punishments meted out in these cases.

We’ve also re-published her "Tips on How to Ruin Your Life", for Posterity, after the jump.  Though it is mostly contrite, it also contains some laughers, (at one point she characterizes her role in all of this fraud as "accidently goofing up.")
How to Ruin Your Life Author Sentenced in Mortgage Fraud Scheme [Strib]

Tips On How To Ruin Your Life, By Jill Lehn

In every person’s life a time comes when you need to look at yourself and ask “Did I really do such a stupid thing?” At the end of August, 2006 I was forced to answer that question and I did not have a lot of time to do it. This is how it all began.

I was hard at work and getting set for another busy day of doing mortgage closings. My telephone rings all day long and I am fortunate to have many closings when real estate times are difficult, so I get to work early to make the most of my time. It’s 8:00 a.m. and I am sitting in my office, well on my way to conquering the day. A noise comes from the front office and the door opens. I walk out and give my enthusiastic morning greeting but it is not reciprocated. Two gentlemen ask, “Are you Jill Lehn?” I say, “Yes I am”. We are so and so with the FBI and we need to talk. My feeling of invincibility immediately went away (it will never come back).

A second later the three of us our in the conference room and many copies of some of my best fraudulent work are being placed in front of me. “You are a very lucky person, Jill. You are being given the opportunity to cooperate fully with us at this time and maybe you could be fortunate enough to get just probation or a year in prison – no guarantees. You could go to prison for five years for each one of these offenses. We could have just come to your home and arrested you. You need to make your decision right now.” I was so freaked out and thank goodness I had the ability to say “I will cooperate”.

Now it is time to understand the beginning. For many years I worked for a different title company and planted everything I needed in place so I could have a title company to truly call my own. It was a lot of diligence, hard work and intelligence. Now, intelligent is an odd word to describe me when you reflect back. I have been in real estate in somecapacity for the past 18 years. I have been a loan processor, loan officer, REALTOR® and title company closer. There is no doubt that I have a thorough understanding of every realm of real estate. There is absolutely no doubt that I did not have enough common sense to see that everything I do in this industry is easily tracked by a paper trail. Any person in any realm of real estate can say anything they like but cannot deny what a paper trail clearly shows.

Over the past three years I did about sixty deals that allowed buyers to get cash back. That is not an issue if a lender approves, but if they don’t it is indeed an issue. An issue that you could possibly ponder for a few years in prison. How it came to be was innocent enough. A valuable loan officer client came and asked if I had the ability to make a deal work so a buyer could get some funds back. Very foolishly I told the truth. It was the worst thing I could have ever started for myself, that loan officer or the real estate industry. I opened a path and an assumption that I would do those deals.

It is quite easy to justify things in your head when you feel the bases are covered. The buyer is fully aware of this, the seller knows, the REALTOR® knows, the loan officer knows. Oh wait … that’s right, THE LENDER DOES NOT KNOW. Funny how that little detail can just jump past the logical part of a brain.

Now let’s make everything totally clear for people in real estate:

1. Unless the lender knows a buyer is going to get money back on a purchase, it is not okay, good or advisable to give the buyer’s money back.

2. Putting a bogus lien on a property so the seller pays it off at closing on a lender approved settlement statement, and those funds end up going back to the buyer in the end, is not okay, good or advisable.

3. Having a seller just write a buyer a check after a closing for any sort of an allowance or credit that the lender does not know they are getting is not okay, good or advisable.

4. Any new way you can think of to go around the system is not okay, good or advisable.


If everything so far in this article has not inspired you to maintain a professional, ethical business let’s talk about your personal life and how being a convicted felon for the rest of your life works in regards to that. It is pretty safe to say that you will not wake up smelling roses for quite a while.

People are driven by a desire to have quality of life and quality of family and friends. That is part of the very reason that so many of us are in the real estate industry. Owning a home is a key to most people’s financial and personal plan.

I had to go home and tell my husband that I received a visit from the FBI at work. Saying those words to a person you love so much is something that is surreal and worse than most things you can imagine. You have no idea what the reaction will be. The only thing you know is that it will not be positive. My husband had no idea about these deals and I had to painfully explain for the second time in one day how I did them and how it worked. For many years I felt like a genius in the title industry but could not have sounded more stupid saying these things out loud. I am so lucky to have a husband that supports me fully and has vowed to stick by my side. Here is a question for you: Would you be that lucky? And, could you bet on that?

When you have to find a way to mentally deal with a situation like this, it is so tough. In my situation, I could not tell anybody or my cooperation agreement would be broke immediately and I’d be prosecuted to the full extent of the law. So, I could only talk to my husband and the FBI. The FBI asks you questions about loan officers, REALTORS®, buyers, sellers and others. Many of these people I considered to be friends and I really cared about them quite a bit.

The FBI told me to not let this ruin or affect my life and family time. That was not advice I took at first but after getting a well deserved “snap out of it” from my husband I started to practice that philosophy. I had so many emotions. Naturally, I was annoyed I got caught and wanted somebody to blame. I had to find a way to stay my always cheery, confident, full of energy self at work and at home. You become suspicious of everything and truly sad. Every time you get a telephone call with a question, or from somebody you do not know it makes you paranoid. You ask yourself “Am I being tested, taped, set-up?” You just don’t know. I cannot mention all the things I have had to do for the FBI, but it opened up ideas in an overactive imagination that could be put in to a spy novel.

For five months I kept face. I’m pretty sure many people close to me did not really buy into it but I did my best. I worked and tried to pay all my bills. That is something very difficult to do when your assets get frozen, by the way. Then, I got another visit from the FBI.

“Jill, we need to charge you now to go forward with the rest of our cases. You need to find a really good criminal defense attorney that specializes in money laundering and wire fraud.” Until I heard that there was still a glimmer of hope in me that they were yanking my chain a little bit to get the most information they could. I have heard of wire fraud and money laundering before but had no idea that what I had done even fell under those categories.

In less than two weeks later I was in front of a federal judge pleading guilty to money laundering and wire fraud. My life went from being secretive about my troubles to public knowledge. I really did hope that I would not have to tell a soul about any of it, but that only lasted for a few weeks. As you tell people that you are not doing creative deals anymore and they get suspicious, things happen. Some people you term as friends are suddenly scared, running for cover and enjoying seeing you fall because they look better. Others are too scared to talk to you at all because they think you are being tapped. The imagination runs wild and you do not know what is true and what is not true.

Lately people I do not know and have never heard of call colleagues and friends to ask about me. For me that is insane. I am a person who likes to go to work and have a great day then go home to family and have a great night. That is it. I am fairly boring and I like it that way.

Strangers who believe they know me and my story takes me to where I am today. I am writing this story to plead with others to learn from this and not make the mistakes that I have made. If you have made them in the past – stop. It is that simple.

In my collective real estate career the errors that I have made are a maximum of one eight of one percent. These deals did not make me rich or give me anything of value in my life. Now, I will forever be defined as a felon and have to go about life in an entirely different way.

These are some huge burdens that I will always have:

1. Making sure my family is not harassed by people from this
2. Explaining myself and proving I am good enough to be trusted in a business relationship.
3. Trying to find a job that will give me an opportunity
4. Never being able to vote again because my opinion does not count in the United States anymore
5. Accidentally goofing up
6. Helping support my family
7. Being able to retire
8. Not getting a second chance
9. Breaking my parents hearts
10. People always thinking you are a target for some harassment
11. Disappointing myself

My next three months to one year will be spent waiting for the telephone call to let me know that it is time for my sentencing. If I have to go to prison, I will get about one month to say my goodbyes to the people I love so much. There is a possibility that I will miss some of the most special moments of my only child’s life. They will be lived through pictures and stories from my husband. Now I cannot do mortgage closings, have my real estate license or apply for a job with a criminal history check. So, I am going to advocate people making the right decision and the smart decision. Choose ethics and freedom over a life dictated for you.

{ 4 comments… read them below or add one }

matt January 15, 2008 at 1:18 pm

kind of sounds like she’s only sorry she got caught.

Mike January 16, 2008 at 7:50 pm

Why do you think this is not an appropriate sentence? If you think about everything she has done to help “cooperate” with the federal officials, you would have to believe that she has led to investigations upon at least every person she has ever dealt with as well as known. I think its fair because if you think about how she is going to live once she is out its really not any different. she really wont be able to work and or work with anyone from her past because of her track record. she has a family just like you and she made a mistake and she is paying for it now. I just hope you Mr. Stenback arent mad because you think people need to be put away for life for this type of stuff. You are always talking about mortgage market declines being pointed toward these cash-back schemes and in certain isolated areas they may be such as new prague and possibly north minneapolis. What you fail to always mention is that stated loans is the sole reason why all this is happeneing. yes over stating is under the “fraud” umbrella but it is a big stretch to try pinning the decling market to cash back schemes and to want to put people away for life. what if the FBI came into your office and investigated every file of yours and saw how many deal that you stated income on? If you knowingly stated a penny more than what they actually made then that is fraud. no one ever thinks of it and for you to ramble on about this everywhere without making note of that its rediculus. I know you have done it as everyone in the business has. it was a part of the business that if you couldnt qualify you need to loan out less or state that you make more or no loan. Ive seen you do it because i used to work with you. Jill will have to deal with this for the rest of her life regardless not just for the 2 years in jail. You need to really look at the big picture instead of looking for instant justice. The New prague people on the other hand deserve a full sentence because they single handedly created and killed an entire community. Nevertheless the punishment fits the crime with her cooperation and thats the bottom line. you all better watch out beause one person leads to another and to another and you will be surprised when someone comes knocking on your door.

Aaron Dickinson - Edina Realty January 17, 2008 at 11:24 am

I agree that this sentence was too short… there should also be a financial penalty of all profits made from this and then multiply it 2x.

Remorse and cooperation after the fact should be a common human decency thing and should give you some kind of reduction, but not so substantial a one.

Barbara Scis March 17, 2008 at 10:23 pm

Crying crooks?Our lives are turned upside down. I hope people like her rat in prison. no sentence will be enough for what they done to us hard working americans,
Truth will set us FREE!

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