Boulder Man Pleads Guilty In $32M Bank Fraud Scheme

BOULDER, CO — A Boulder man pleaded guilty to federal bank fraud and aggravated identity theft charges, the U.S. Attorney's Office announced Friday.

Between 2015 and 2017, Michael Scott Leslie, 57, sold a Texas bank 144 fraudulent residential mortgage loans valued at $31,908,806, according to a plea agreement. Leslie owned several businesses that were involved with financing residential mortgage loans, which he sold to investors.

The borrowers listed on the 144 loans were real people, "but they had no idea that their identities had been used as part of the sale of the fraudulent loans," the U.S. Attorney's Office said. Leslie had access to the people's identifying information because the people either used one of Leslie's companies for legitimate residential real estate transactions, or the borrowers had been solicited by one of Leslie's companies about refinancing their existing loans, the office said.

In the case of refinancing transactions, Leslie secured permission from the borrowers to request credit scores and history from the major credit agencies, court documents show. After receipt of the scores, Leslie often told the would-be refinance borrowers that they did not qualify for refinancing, the attorney's office said. Leslie then recycled the borrowers' information, obtained through prior legitimate transactions or attempted refinances, to create and sell nearly $32 million of fraudulent loan packages, court documents show.

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In the scheme, Leslie forged signatures on closing documents and fabricated and altered credit reports as well as title documents, often by using the names of legitimate companies, the U.S. Attorney's Office said. The fraudulent real estate transactions were never filed with the respective counties in which the properties were located, there were no closings, and no liens were ever recorded, the office said.

Through "numerous" bank accounts for the various business entities and his personal accounts, Leslie used money "in a Ponzi-like fashion from prior fraudulent loans sold to the victim bank to fund future fraudulent loans," the U.S. Attorney's Office said.

The fraud was eventually discovered, and Leslie was charged June 5 with federal bank fraud and aggravated identity theft.

The case was investigated by the Denver office of the FBI, and the offices of the Inspector General for both the Housing and Urban Development and the Federal Deposit Insurance Corporation.