Miami Man Pleads Guilty To Inflating Mortgage Values

Steven Gordon, a former principal at Bayview Financial LP, Coral Gables, Fla., pleaded guilty to wire fraud charges related to a five-year scheme to inflate the value of mortgage loans to increase his commission compensation. The Miami resident was dismissed from the firm in 2006. Bayview bought portfolios of loans from lending institutions, pooled these loans into "special purpose entities" and then issued securities backed by those loans to the investing public. While employed at Bayview, Gordon 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 the residential mortgage securitization program. Gordon's fraud caused Bayview to pay him more than $2.8 million in excessive and undeserved bonuses. Sentencing has been scheduled for April 23, 2009.