After engaging in a five-year scheme to inflate the value of mortgage loans to increase his commission compensation, Steven Gordon, a former mortgage securitizer from Miami, has been sentenced to serve 36 months in prison.
Prior to his dismissal in 2006, Gordon was a principal at Bayview Financial, a Coral Gables-based finance company that buys portfolios of loans from lending institutions. Bayview pooled these loans into newly formed business entities, called "special purpose entities," and then issued securities backed by those loans to the investing public.
While employed at Bayview, Gordon was found to have negotiated the purchase of thousands of loans for Bayview's residential mortgage securitization program. His incentive compensation was based, in part, on his ability to buy those loans at a low cost.
Gordon admitted that between 2001 and 2006, he engaged in a scheme to defraud Bayview, in which he regularly altered credit information affecting the value of more than 2,800 loans acquired for Bayview's residential mortgage securitization program.
Gordon's fraudulent scheme caused Bayview to pay him more than $2.8 million in excessive and undeserved bonuses.
