Archive for Thursday, August 18, 2005

Ex-candidate Taff indicted over home loan

August 18, 2005

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A two-time Kansas congressional candidate has been charged with illegally using donated campaign money to help set up a fraudulent home mortgage.

A federal grand jury on Wednesday indicted Adam Taff, a former Republican challenger to U.S. Dennis Moore in Kansas' 3rd Congressional District, on one count of wire fraud and one count of using political donations for personal use.

The charges came as a shock to many, including Bill Lacy, director of Kansas University's Dole Institute of Politics. Taff served as one of the Dole Institute's first two "senior fellows" during the spring semester and led a study group titled "In the Crosshairs: Realities of Running a High-Profile U.S. Congressional Race."

"Here's a fellow that I think everyone presumed was squeaky clean, and one would hope that eventually it will come out that that is the truth," Lacy said. "But he's been charged with something that is obviously a serious crime, and it's troubling."

Both charges are related to the 40-year-old Taff's purchase of a $1.2 million Lake Quivira home from a business associate starting in November 2003, as he was gearing up for a second congressional campaign.

At the time, Taff worked for Myers National Mortgage Company in Overland Park. Prosecutors allege he conspired with the company's chairman, John D. Myers, 48, Leawood, to make it appear Taff had made a down payment on Myers' home when in fact he hadn't.

To accomplish the scheme, Taff withdrew $175,000 in donated money from his campaign accounts and put it toward a $300,000 bank check payable to Myers and his wife, according to the indictment. Taff and Myers then met with a title agent in Overland Park, represented that the money was a down payment from Taff to Myers, and allegedly had the agent fax a false closing statement to a mortgage company showing that the money was going to Myers.

Then, with Myers' consent, Taff took the $300,000 check back and returned the money to his campaign accounts, according to the indictment.

"You can't provide false information in a home-loan deal," said Jim Cross, a spokesman in U.S. Atty. Eric Melgren's office. "It becomes a federal issue when a fax machine is used to send false information across a state line for the purpose of defrauding a mortgage company."

Prosecutors also allege Taff listed his campaign accounts as his personal assets and falsely stated in the loan application that his monthly income was $15,000 instead of his actual monthly income of $6,500.

Cross said he couldn't discuss how the case came to light. It was investigated by the FBI.

Taff, a former fighter pilot viewed as a GOP moderate, lost to incumbent Democrat Dennis Moore in the 2002 general election. He mounted a second bid for the seat in 2004 and lost to conservative Kris Kobach in the Republican primary.

Attempts to reach Taff for comment Wednesday were unsuccessful. Myers, who is listed as a co-defendant in the wire-fraud charge, did not return a phone call to his home.

Taff likely will be issued a summons to appear in court instead of being arrested, Cross said. He faces up to 30 years in prison if convicted of wire fraud and up to five years in prison if convicted of misusing campaign funds.

"All I can say is that if these allegations are true, (Taff) has got some very serious problems," said Tim Shallenburger, chairman of the Kansas Republican Party and executive vice president at American Bank in Baxter Springs. "But as a banker, I have to say I think there may be a lot more of this kind of thing going on than we know. : We have people come in all the time who want to borrow money and who say 'Why do I have this much collateral, or put this much down? I have a friend. : he got a loan and he didn't have to do this. Why are you making me do this?'"

Shallenburger said he did not know Taff well but had no reason to think he was a "bad person."

A vice president of the mortgage company to which Taff allegedly submitted fraudulent information said the company was cooperating with authorities.

"If the allegations are true, we will do everything within the legal limits to ensure the protection of our shareholders' best interest," said Mike Enos of NovaStar Home Mortgage Inc. of Lake Forest, Calif., and Kansas City, Mo.

NovaStar is a one of the nation's largest wholesale lending companies. It specializes in nonconforming, single-family mortgage loans. Nonconforming loans are those rejected by conventional lenders because of size, credit shortfalls, or other circumstances.

Comments

armyguy 9 years, 9 months ago

I am not ready to convict yet, but enough with the "I'm sure he didn't know it was wrong, if he did it stuff" He works for a Real Estate Mortage Company, he also went to law school, at least thats what he told me at some campain thing.

If he did and it can be proven, I'm sure he will only get probation, and maybe he will have to sale the house.

Dani Davey 9 years, 9 months ago

I know everyone is going to be cynical and talk about politicians all being criminals but I'm really shocked about this one. I got to know Adam fairly well last year at the Dole Institute and he's the last person I would imagine being indicted in a federal court.

Terry Bush 9 years, 9 months ago

I don't know, but it may be a case of someone in the banking industry saying to a pilot "do it this way, it's OK and done all the time!" and Taff not knowing any better.... If it sounds too good to be true.....

laughingatallofu 9 years, 9 months ago

Well, Adam Taff OUGHT to have known better. After all, he was running to represent the residents of the KS 3rd district in Congress.

Sadly, most of us don't have "political contributions" upon which we can draw upon when the opportunity presents itself. What was he thinking!!!???

If he's innocent (and so far, he is), so be it. But if he's found to be guilty, I think that taking away most or all of his assets would be more punitive than throwing him in a minimum-security country club for a couple of months/years.

Steve Jacob 9 years, 9 months ago

The KC STAR really explans what happened better on this. He did pay the money back to his campaign before he was caught. I think in the end, he just did something very stupid, and he probally does not deserve any jail time. Probation and a big fine? Yes.

Jamesaust 9 years, 9 months ago

This deserves some prison time. The issue is not whether money was "borrowed" from campaign funds (that would be bad enough). Here, several parties were defrauded into extending a mortgage based on multiple mistatements - the mortgage company of course but also the title company - that a downpayment of a certain size was in fact made, that his income was $15k per month, that had assets that he did not have. Also, what remains to be shown was how the "fake" downpayment (the money returned to the campaign fund) was going to be credited. There's only two choices - was this other accomplice making a gift of his own (or the company's) money to Taff (was Taff going to declare the gift on his income taxes)? Was the accomplice going to 'cook the books' thereby actually paying the downpayment but defrauding the employer? What was the accomplice's motivation here? People don't usually commit felonies for nothing in return.

Besides, how could someone with this degree of exposure expect questions to have not been asked? He spent most of his adult life in the military (which doesn't pay), he's 40 now with a middle management type job that pays $78k a year (nice but nothing shocking). Except for a large inheritence or winning the lottery, how would he manage to purchase a $1.2 million house? How did he anticipate making the monthly payments?

John1945 9 years, 9 months ago

Our system has become so dependent on credit that there are all sorts of bizzarre things going on to get people financed. If Taff's boss told him this was a routine way of getting a loan, I can't imagine he would have been too suspicious.

In this case he didn't actually spend any money from his political account other than to apparently make it appear that he had a substantial downpayment.

My questions are was the house actually worth 1.2 million, what's happening with the title company person and have the feds checked out the appraisal on this unit to see if that was unrealistically high.

I'm not fond of Taff, but this seems a bit overboard for what I've read so far.

cowboy 9 years, 9 months ago

Send him to boot camp down in wamego ! Its designed for first offenders. I am sick of white collar criminals not doing time when we sentence the less advantaged to jail time here in Liberal Lawrence.

Wilbur_Nether 9 years, 9 months ago

Let's keep in mind that Mr. Taff has not been convicted of a crime; he has only been indicted. Discussing sentences is a bit premature since there has to be a trial, probably by jury.

Let's allow the judicial system to do its thing. If he is acquitted, this speculation becomes irrelevant. If he is convicted, well, then let's knock ourselves out with speculation.

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