Mortgage fraud

She found $40,000 in cash in my freezer one night. So she's like, "What is going on?" So we have this conversation and I tell her, "Look, people are looking for me." "Who?" "Law enforcement." "Which ones?" "All of them." She's like, "For what?" I go, "Mostly bank fraud." And she's like, "Well, how are they not finding you? I mean, people know you like your general contractor," which I met four months before, this guy, six months before, this one, two months before. She's like, "So-and-so, so-and-so..." And I'm like, "Right. Right." She's like, "I mean, they've got your name, they've got your... I go, "Well, that's identity theft." And she was like, "What do you mean?" I said, "Well, my name's not... it's not Joseph Carter." "What is your name?" I go "Look, don't even worry about it." The following is a conversation with Matthew Cox, a conman recently released from federal prison where he served 13 years for bank fraud, mortgage fraud, identity theft, passport fraud, and other charges. He has admitted guilt to all of it. He has written true-crime stories of many of his fellow prisoners. And now he continues this work by interviewing criminals about their crimes on his YouTube channel that I recommend called Inside True Crime. Exploring the mind of a criminal is exploring human nature at the extremes, often in its most raw and illuminating form. And that is something I definitely want to do with this podcast to understand the human mind and everything it is capable of. This is the Lex Fridman Podcast. To support it, please check out our sponsors in the description. And now, dear friends, here's Matthew Cox.

As part of this, you did a lot of fascinating things. One of the things you did, you talked about creating synthetic people, meaning creating fake identities. What does it take to do that well? So your credit profile is made up of your name, date of birth, your address, and your Social Security number. And then there's other things where you work, that sort of thing. But what people don't realize is there's so many people out there that think that the credit bureaus already know who you are, but the truth is, the first time the credit bureau has ever heard about you was when you told them. The first time you applied for a credit card, they created a credit profile at that moment. Prior to that, they had no idea. So the first time you apply, you give them your full name, date of birth, Social Security number and your address, and they create a credit profile and they say, "Hey, no record found of this person. He has no credit, nothing, probably got denied."

You mentioned right before telling the story of this elaborate scam that you were on federal probation. How did that happen? So I mentioned that I owned the mortgage company.

So are there people in this world you trusted or you still trust? The problem is eventually I cooperate. And at the time, I didn't want to cooperate. I didn't believe in cooperation. But after seeing how many people cooperate and the way the system is set up, I think that my understanding of loyalty is vastly more realistic now. And I think that if you are committing crime, if you are absolutely like the things I did, I did a bunch of scumbag things. I mean, I'm not killing people, but I'm doing scumbag things. I'm lying, cheating, stealing. I'm a thief. You boil down to it. That's what I am. So you can't go around behaving like a scumbag, dealing with scumbags and then expect those same scumbags to suddenly abide by some kind of a street code and not roll over on you. And it does happen, but it's in the 90 percentile of people that cooperate, 90 something percent. And people cooperate when they're not even looking at any real time.

I still think it's rough but those same houses are going for three and 400,000. So I'm buying houses. I got to get qualified borrowers. I do all the renovations. It's a nightmare. Looking back, it's like, "Well, then you got to bite the bullet. It's just what you have to do." I didn't want to do that. I didn't want to do it. Whether it was laziness or, I don't know, I just thought, "I'm good at this. I'm going to run. I'm just going to start running a scam. I'm going to figure out how to drive the prices up, buy the houses for 50, record them at 200,000, and then have these synthetic identities, buy all the properties, refinance them, pull out the cash, make six months' worth of payments, let them all go into foreclosure." And that really, really started working well, very well. I had one time where I had a guy, it was James Red, the synthetic identity was James Red and he had bought two or three houses, and there was somebody at the office who was friends of somebody who knew the title company where we were closing the loans, and he called her, her name was Mary, and said, "Mary, this guy, James Red, like Cox is doing something shady. James Red doesn't even exist." She goes and looks at her last couple files and she realizes, of course obviously, this guy never showed up. She remembers Cox picked up the files, and he's saying he doesn't exist. So she freaks out. She calls the mortgage broker. Mortgage broker calls me, mortgage broker calls me up and says, "Listen, Mary said she's not closing the next loan unless James Red shows up." And I went, "Wow, that's a tough one."

So, you're on probation and you're almost getting caught, you're almost getting caught, and you're doing these really large-scale scams. How does it get to the point where you're on the run? I'm doing multiple scams. So, it's not just that I'm doing the scams with the Reservoir Dog scams. I'm not just doing those guys. I'm also creating other identities because I've got other people that are involved. They want to do a scam. So, this chick I was dating, she wanted to run a scam. So, I set up a scam. It's semi-complicated, but the bottom line is she ends up stealing a real person... We steal a real person's identity. I have a real person's identity. We get a driver's license in her name, open up some bank accounts, go rent a piece of property in her name, and I transfer the deed or the deed from the property out of the real owner's name, I transfer it into her stolen identity. We then refinance the house like three or four times. So, she starts going to these different closings. Her name is Allison, and she's pretending to be a Puerto Rican woman named Rosie de Perez. Allison has brown hair and blue eyes. Rosie De Perez clearly doesn't. So Allison, when we make the ID, she dyes her hair black, curls it a little bit, and gets the pictures taken of herself before she goes to the first closing to get a check for like a hundred thousand dollars. We've got three of these scheduled. She changes her hair color, she dyes it back like a dirty blonde, and she goes to the first closing and she gets a check, a check for 100,000, let's say. I don't know what it was like 95 or 105, whatever, roughly $100,000. She gets a check at the closing, they give it to her. We then go to the next closing. Well, at the next closing, the title person has her sign all the documents, but she's looking at her like something's not right. Looks at her ID, makes a copy of the ID, looks at it and says, "This doesn't look like you." And she's like, "You don't look Hispanic." And she's like, "I'm half Hispanic." But keep in mind the photograph was her. So she's saying, "This doesn't look like you," but it's her. Granted she had the curly hair a little bit, but that's it. So Allison is like, "It's me." And she's like, "Look, I'm not going to give you the check. Let's just sign the documents. You can get the check. I'll let you know."

Well, that's happening. We're still flipping properties. And, one day... I have a buddy named Steve Sutton. Remember the sheriff's deputy? Keep in mind, it's funny because I've done bad loans for police officers, sheriffs, lawyers, doctors, across... everybody. These aren't all- Yeah, everybody.

Sorry. Sorry. Sorry. I know I'm a disappointment. Sorry. Bam. I take off, go to Atlanta. When we went to Atlanta, I already had the name of a guy named Scott Kugno that I'd done a loan for. I had his vital information. I have his name, date of birth, social security number, mother's maiden name, and where he was born. One day we were having a conversation and I just slowly pried all that out of him. We'd done a loan for him. So, I already had his name, date of birth, social security number. But, to steal his identity, I need to know where he was born and his mother's maiden name. Through the course of the conversation, I just pried, "Hey Kugno, is that... What is that? Is that like Irish? Is it..." No, it's such and such. What's your mom's name? Oh, such and such. Oh, okay.

What's the primary method of income here when you move to a place? South Carolina, how do you make a hundred thousand at this time? Oh, well, right now, I'm living in this guy's house and I satisfied his loans. The house is worth 200,000.

So the FBI is looking for me kind of in Tampa, and they've put out a fugitive warrant for me, which is how the US Marshals got involved. So the US Marshals track down fugitives.

And I'm living in areas that these cars are everywhere. So I end up going to Charlotte, North Carolina. We rent an apartment, we decide to run a scam in South Carolina, so I go to Columbia, South Carolina. And in between this period of time, we go to Las Vegas. We go to Las Vegas to drop off a bunch of money to Becky's son's father, who's taking care of her son. We drop off some money there we go, and we start... And while we're there, it's like, "Hey, there's homeless people here." So you're always-

Oh, my God. So, I go all the way back to Charlotte. I pack up my apartment. I drive all the way to Houston with my entire apartment packed up, by the way, in a U-Haul. The next day, the next morning, she's got people there packing it up, movers. We pack it up. I drive the U-Haul all the way to Houston. It takes a couple days. We have some guys unload it into a storage unit, because I'm going to stay with Becky until I find my own apartment. As we're driving around the neighborhood, super nice. She's living in that 20th floor or something of some huge high rise, great apartment. We drive by and I go, "Oh, stop the car and I want to get out." It was one of those cone things where there's flyers for a house. I jump out and I get the flyer. She's like, "What are you doing?" I go, "Well, I was just looking at the flyer," and she says, "I don't want to do a scam here. I want to live here. This place is nice. I love it here." I went, "Right, I understand." I said "No, but I have to find an apartment." She goes, "Oh, I'm just so disgusting. You can't stand to spend even a couple weeks with me." She goes just ballistic. She's screaming at the top of her lungs, and I know she's going to get me caught. She's never going to get me out. She's already told me that. So, we go back to the apartment, we go upstairs. I was so scared of this chick, bro. I was so scared. I remember I was going up in the elevator, and this girl gets on, clearly a stripper. I mean, drop dead, just wearing stripper clothes.

So I can't be driving. So, I stopped at Baton Rouge at one point and got a cell phone, like a burner phone, a Verizon Virgin mobile or something, one of those little phones. So, I bought one. I call a few people at home, back home, called my mom. She's in tears crying. My dad's yelling in the background. Just a small attention. What did your mom and dad say? Do you remember anything stand out to you?

She's like, " They come around every once in a while. Everybody's gone in, everybody's cooperating, everybody's talking, everybody's blaming you," including her. So, as we're talking, she said, "Look, the main FBI agent on the case, she told me if I ever spoke with you to have you call her." I was like, "Yeah, I'm good." So she goes, "Her name is Candace, and she wants you to call her." She goes, "At least call her for God's sakes. Maybe you could just turn yourself in. Maybe you can negotiate just like a couple years. If they're not going to catch you, then maybe turn yourself in. Maybe it'll help, at least hear her out." I was like, "Okay, all right. You're right." Hang up the phone. I call Candace. She picks up the phone. I go, "Hey." She goes, "Who's this?" I go, "This is Matt Cox." She goes, "Hello, Mr. Cox. How are you?" I go, "I'm doing okay. How's it going? I understand you want to talk to me." She goes, "I do." I said, "What can I do for you?" She says, "You can turn yourself in." I go, "Well, that's not going to happen." I said, " What else do you need?" She said, "I think that you should think about turning yourself in." I said, "Why? Well, what am I looking at?" She goes, "Well, that's not how it works. The way it works is you turn yourself in and we take that into consideration." I said, "No, no, no, no." I said, "That's not good enough." I said, "I'm not stupid enough to turn myself in and hope for the best." So she says, "Well, let's talk about this." I said, "Well, what am I looking at?" She goes, "I don't really know. I can't tell you that."

No, lady, I wouldn't believe you if you told me water was wet. I don't trust you. I hung up the phone, threw it out the window, and I ended up going to Charlotte, dropped off the U-Haul van. I would've actually brought it back to the dealer. It's not like I evaded. I brought it back. So, I bring it back. I go to my old apartment in Downtown Charlotte, and I remember thinking I would be okay. I know by this point that they knew Michael Eckert's name. They had the address in Charlotte. So, I know by this point, it's been five, six days. So, I know they've tracked him back there. So, I figured if I could get my car, I'm fine. So, I go into the apartment complex, and it's one of those four or five, six-story apartment. Those are parking things that stack up. So, I go into this parking garage thing. So, I go in. I'm on the third floor or something. I look at my car and I get in my car. I remember as soon as I drove out of the parking garage, I was like, "I'm good." So I can go ahead and pull across the street and stop at Starbucks. So, I stop at Starbucks. I walk into Starbucks. I order a Starbucks. I'm standing there waiting for the barista. I look over and it's two people from the apartment complex staring at me. They're whispering and pointing, and I remember thinking, "This is the fifth of the month." I hadn't paid my rent. I hadn't been there. So, I thought that makes sense. Maybe I'm picturing an eviction notice or a three-day notice on my door or something. I'm like, "Okay." Then one of them bolts out the back.

So you're getting more and more famous- It's bad.

All right. All right. So where did the sentencing end up? So I should say first on the cooperation subject. My lawyer wanted me to cooperate, and by this point I realized you don't have a choice. No, that's not true. I could have been a gangster.

That's a lot of years. I would like to tell you that when they gave me the time, that I was stoic and I stood there and I took it in. But the truth is, I cried like a baby, like a small child. You've never seen anyone cry like this in your life. I was just, How did I get 26? What did I do to get 26 years like murderers, rapists? I've met guys that kidnapped guys that got 15.

And here's the thing. At some point there, I ended up getting... Well, the FBI started showing up there at the prison, questioning me about my files in Tampa, that [inaudible 04:53:33] of the 12 guys that were indicted? Mm-hmm.

Well, I knew I liked it, but yeah, I think I got better and better at it. I mean, as you're writing... And they had creative writing classes in prison at the Lowe. The Lowe was a much different breed of animal. You could very easily get hurt, you could get hurt either place, but there were guys that have life sentences that have been working out for 20 years and were just super angry at the medium. And if you got hurt at the medium, it was probably really go bad, as opposed to you get hurt at the Lowe, it's more like a fistfight in high school, with knives. So anyway, so I am there. I'm writing, I'm doing that. And there was a guy on the compound that came on the compound about that same time. His name was Frank Amadeo. Frank Amadeo is a rapid-cycling bipolar with features of schizophrenia. Rapid-cycling, bipolar with features of schizophrenia.

Yeah. But about it, like a year and a half later, I ended up getting out of prison and I went to the halfway house. What'd that feel like, freedom?

Is your dad still with us? No, he died when I was in prison. He came to see me two or three times.

Do you regret... [inaudible 05:52:39] just look back, would you do any part of your life different? Oh, I'd scrap all this, yeah. Yeah, I'd scrap all this to be... You always hear these guys say, "I wouldn't change it because it made me the man I am today." The man I am today is a fucking 54-year- old scumbag, multiple felons, starting my life over broke, living off of scraps, trying to make YouTube work. I've got two dead parents. I'm divorced. I have a son that doesn't talk to me. I have a son that doesn't talk to me for good reason, not because of a misunderstanding, because he understands. You can't even argue with him, he's got a powerful argument. "I don't want to be a part of this guy's life. He's a scumbag. He stole money. He went on the run. He abandoned me when I was three years old. I don't want anything to do with him."