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Sale Of The Century
  • May 13, 2013 : 15:05
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Matthew Cox always wanted to make his father proud, but he didn't think it would land him on the top of the Secret Service's most wanted list. His scam was real estate fraud, and he was the best. For five years during the peak of the housing boom, he crisscrossed the southern United States, hustling home owners and banks for as much as $26 million—with the help of a revolving cast of female accomplices.

Weaned on heist films, he went to cinematic lengths to succeed, becoming a master forger, assuming dozens of identities and spending tens of thousands of dollars on plastic surgery to alter his appearance. It's one of the craziest crime sprees in recent memory. It also offers new insight into the mortgage crisis from which we're still reeling. Cox surfed the tidal wave of greed in the housing industry right up until it crashed, helping lead America into one of its worst recessions ever. He epitomized just how reckless lending practices were over the past decade. For everything we hear about the bad loans that Wall Streeters peddled, this one horny young con artist in Florida had them beat. "I'm going on 20 years as a federal public defender," said his attorney Mildred Dunn, "and I don't know that I've ever seen anyone quite as imaginative as him."

Despite Cox's ingenuity, this globe-trotting fugitive failed to take one thing into account: that he would end up in prison. That's where I found him one sweltering afternoon last summer, sitting in a bare concrete courtyard at the federal correctional institution in Coleman, Florida. A short, clean-cut 43-year-old with spiky brown hair, green eyes and a graying soul patch, Cox stood out from the tattooed prisoners milling nearby. "It's depressing," he told me as he glanced furtively around. "This is not a good environment."

For the next 21 years, however, it's his, and I had come to get the first full account of his inside story. How did a dyslexic kid from Florida become one of the greatest swindlers of our time?

If you ask Cox, he'll give you two answers. Told by his father that he'd never amount to anything, he had an insatiable need to prove himself. And as he discovered, he had just the power he needed to do so: an ability to look at a system and artfully exploit its flaws. As he told me, "I see something, and I just see the holes in it."

Cox first saw holes every time he picked up a book. Dyslexic, he hated the fact that he couldn't read like other kids. To make matters worse, he was put in a special program where some of his classmates had Down syndrome, which compounded his insecurities. A teacher told him he'd never graduate from high school. "That almost made him more determined," recalled his mother, Margaret.

Ashamed of his condition, Cox became an expert actor. To avoid the embarrassment of not being able to read a menu quickly, he realized he could just order chicken all the time and go unnoticed. It was a key insight for the future con artist. "You come up with ways around things," he recalled. "It's diversion." Cox's dad, an insurance agency manager and alcoholic, was less than sympathetic. "You grow up being called a loser and ‘you stupid nothing,'?" Cox told me with a grimace. "The only way to fix all your problems is with money."

Despite his troubles, Cox grew to be charming and ambitious, a people pleaser with a taste for fast cars, sexy women and fine art. To compensate for his diminutive frame, he began obsessively working out. He also taught himself to paint. Although he graduated summa cum laude from the fine arts program at the University of South Florida, his dad told him the best he'd do was to become a caricaturist at Disney World.

Determined to prove his father wrong, Cox set out to look for a future. His girlfriend, who worked in the mortgage industry, suggested he take a job as a broker. Despite the recent dot-com crash on Wall Street, a housing bubble was beginning to grow—particularly in Florida, where aging boomers were eager to retire. Cox saw an opportunity to join the 28,000 other people in the state with mortgage-broker licenses. He got a job and a cubicle in a mortgage-brokerage office.

Though a natural salesman, he couldn't earn enough to maintain his increasingly expensive lifestyle. With credit card bills going unpaid, he fell into debt, warding off repo men and foreclosure—and facing the crushing reality that he'd have to move in with his parents.

Then his fortune changed. Cox had a sizable deal that wasn't closing. His client had been late on her rent. Now she wanted to buy a place, but banks were wary. His boss offered a solution: Take a bottle of Wite-Out and doctor the application so it looked as though the rent payments had been made on time. Cox had never done anything criminal before, but he felt desperate enough to dab Wite-Out on the page. "That decision changed the course of my entire life," he later recalled.

When the tweaked application closed without a problem, Cox became a con artist—in the truest sense of the word. With his steady hand and eagle eye, he discovered his fine-art training made him an expert forger. He began to meticulously craft bogus documents he needed to close a loan: W-2 statements, pay stubs and canceled checks. He even figured out how to make his own notary stamp.

Before long Cox left his job and opened his own company to cash in on his skills. He had reason to be inspired. By 2002 America's real estate market was, as The Washington Post put it, "roaring." To beef up the economy, mortgage rates dropped to their lowest in 30 years, fueling a wave of home purchases and refinancing. Although some had concerns about an overextended bubble, Federal Reserve chairman Alan Greenspan told Congress not to worry, attributing the boom to the "demand of low mortgage rates, immigration and shortages of buildable land."

But the boom, as Cox knew, was also sparked by scams like his own. Remarkably, Cox later recalled, his forgeries were "caught all the time" by various underwriters and banks. But, he said, despite people making vague threats to report him to the FBI, no one ever did. Everyone was making money, so why fuss?

Cox soon realized there was a way to make even more cash. Instead of doctoring applications of real people to get them loans, why not make up fake identities and use them to take out loans for himself—loans he would never pay back?

Using his access to home loan applications, Cox stole Social Security numbers—even from toddlers—and then created false identities to go along with them. He got so brazen that he named some of his fictitious people after colors, inspired by one of his favorite crime movies, Reservoir Dogs. "I thought I was being clever, but it was obnoxious," he recalled. He was also penning his own loosely autobiographical novel, The Associates, about a mortgage-fraud con.

But Cox couldn't outrun his scams forever. Eventually one of his counterfeit canceled checks caught up with him, and he pleaded guilty in 2002 to one count of conspiracy to commit wire fraud. The plea only emboldened him. The sentence, he marveled, was remarkably light: a $1,000 fine, 42 months of probation and the loss of his mortgage license (which he had never needed to pull off his dirty work anyway).

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read more: News, issue may 2013

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