The subprime mortgage crisis of 2008 resulted in a lot of banks getting bailed out, instead of being held responsible. In place of the banks, the Obama administration, led by Attorney General Eric Holder and then-FBI Director Robert Mueller, looked for easy, juicy targets. Mortgage brokers and real estate agents fit the mold. They were generally small, didn't have a lot of connections with the government or the courts, and the public was looking for someone to blame for the decreasing home prices and skyrocketing foreclosures.
"Operation Stolen Dreams" was set up in various large cities to go after them. In Cleveland, the feds targeted several hundred real estate brokers, including Tony Viola. They called it "The Nation's Largest Mortgage Fraud Scheme." Viola was a no-brainer for prosecutor Dan Kasaris, who managed condos and whose wife was a real estate agent – they were both direct competitors of Viola.
Prosecutors claimed Viola and the others illegally tricked banks into offering mortgages with no money down. This was bizarre since the banks were advertising these loans on TV and on their websites. Viola said it was like tricking Starbucks into selling coffee. Incredibly, after Viola was prosecuted, the government changed its position and went after some of the banks for knowingly offering those loans. It was even weirder considering Kasaris and his wife also bought and sold houses with no money down and cash back.
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Prosecuting Viola and others in real estate was an easy sell because everyone wanted to blame someone for consumers buying homes they couldn't afford. Prosecutors portrayed banks as the victims, but the banks were actually unethically pushing these loans. Lenders would make up documents to make sure people qualified, making it look like they made more money than they did. If the lenders knew the applicant's employer was going to leave or go out of business, they would still authorize the loans. They were charging a lot of prepayment penalties and providing high interest, variable rate loans. When people got their payment coupon books, they would discover their tenants' rent didn't even cover the payments. The banks were in a rush to resell the loans on Wall Street, so they'd have no risk after that if the mortgagor defaulted. Bank executives told FBI agents during the prosecution that the banks approved of the loans and didn't lose any money as a result of the loans Viola assisted with.
Viola didn't even own a mortgage company; his business bought and sold properties. Even more bizarre, prosecutors claimed he owned two companies that he didn't. When they realized their mistake, they said they had lost the computers they had taken as evidence from the two companies. A former colleague of his who had testified that he owned the two companies realized her mistake and asked prosecutors to let her correct her testimony, but they wouldn't let her.
Viola didn't take a guilty plea because he believed he was innocent. If he had stolen money from banks, the banks would have sued him. He was prosecuted in both state and federal courts, since it was a joint task force of multiple law enforcement agencies involved. They worked in collusion; if state investigators found a witness positive to Viola, they wouldn't send him to the feds, who could then plead ignorance. Prosecutors lied and claimed there were no FBI 302 interviews where the bank executives said the banks weren't tricked into the loans.
During the prosecution, the task force sent their office manager, Dawn Pasela, to pretend to help Viola, but she really secretly recorded him, wearing a wire. She even contributed to his defense fund to throw him off track. She reported his defense strategy back to the prosecution, which tipped them off into claiming they lost the computers he had been intending to use as evidence. Some of Pasela's colleagues eventually told her what she was doing was illegal and she became alarmed, but it was too late; by then Viola had lost in the first trial against him.
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Pasela found evidence the prosecution was hiding from Viola and took it home, telling Viola about it. She found out later that the prosecution was forging her signature on evidence logs. She told Viola that in the next trial, not only could he prove he wasn't guilty beyond a reasonable doubt, but he could actually prove his innocence. Thanks to Pasela, he won that trial, incredibly without an attorney and from prison. He produced the 302s she'd recovered where the bank executives exonerated him, and had his colleague recant her testimony about him owning two companies. Pasela produced lender files and internal spreadsheets that confirmed banks were fully aware borrowers were not making down payments.
Pasela did not want to testify because she was receiving threats from the prosecution that she would be indicted if she did. The judge ordered (CR-10-536877-I OHIO vs. TONY VIOLA) her to, but she failed to show up. Pasela was found dead in her apartment. The cause of death was allegedly alcohol poisoning, but there was no evidence she had thrown up.
The judge in the case told the jurors after their verdict of innocence that he agreed with them. He also put in writing that he thought Viola was innocent. But Federal District Court Judge Donald Nugent would not do anything to help, so Viola served time in prison for eight and a half years. Only when his appeal got to the 3rd Circuit Court of Appeals in 2019 was Viola finally exonerated. They were persuaded by his colleague who had recanted her testimony and affidavits from Pasela's parents. The DOJ and FBI admitted they made false statements.
Viola is very grateful for Pasela. If she hadn't come forward, he would still be in prison with 12 years to go, which he was looking at in the second trial. He's now asking the court for sanctions against the Department of Justice. One detective lied repeatedly during the federal trial. Viola wants the prosecutors responsible, Mark Bennett and Kasaris, sent to prison. He has started a petition to indict them. He also set up a website exposing everything that happened. The evidence likely proves the innocence of 1,300 others who were prosecuted by the task force.
Viola calls DOJ the largest criminal enterprise in the world. He's learned that these prosecutors will say or do anything to preserve a conviction. They break the law routinely and have a philosophy of winning at all costs. They protect each other and the judges allow it. They're part of the deep state and stay on as entrenched bureaucrats through multiple administrations. Many of them are still there now under President Trump. Viola's case is so atrocious hopefully it will finally prompt a major cleanup.