Friday, June 20, 2008

Mortgage fraud story sees light of day....finally

OK, I had hoped to lay off the Flint Journal for awhile, but then the U.S. Attorney filed charges against a series of mortgage fraud suspects and my blood boiled over again.

Yes, we're talking about Kurt Heintz and his Great Lakes Mortgage company that I had researched just about a year ago right now. To keep from having you search back through 130 posts, here's the Reader's Digest version.

Last year in April 2007, thanks to a number of Davison Township residents, I was turned onto a large mortgage scam that had occurred in a high rent subdivision called Rivershyre. I spent more than two months pulling tax records, Treasury records and other documents to show quite clearly that Kurt Heintz and his company had seriously inflated the value of the Rivershyre properties in getting loans.

My wife and I spent a romantic evening driving through the subdivision logging each property by address, noting whether it was occupied, empty or for sale or any combination of the three.

Not to be immodest, but it was one of the more detailed and well put together investigative pieces I had done for the Journal, or any other newspaper for that matter. When I finally filed the story, I had, of course, attempted to get comment from Mr. Heintz and had visited his home and place of business. After a young child answered the door at the Heintz's rented home in Grand Blanc Township, I asked to see Kurt Heintz. The child said he would go get him. A man and woman came to the door and when I identified myself, he denied that he was Mr. Heintz.

Before going to the house I talked to a neighbor who knew Mr. Heintz and told me what he looked like and said he was home. So I knew the man was lying to me. I called him on it as politely as I could, but he wouldn't budge from the story, but assured me that as soon as "Mr. Heintz" came home he would have him call me. I explained to him I was working on a story and must hear from "Mr. Heintz" soon.

As you can probably guess, no call ever came. So I submitted the story for publication last August or September. A couple of months work and a fortune in copy paper for all the documents were complete.

At that point, the top editors immediately started wringing their hands and turned the story over to the REAL editors of the Journal, a bunch of high-priced lawyers, who began ripping the story apart. Without a comment from Heintz, I was told, there could be no reference to him.

Note to Journal story subjects: Want to avoid having your name in print: Don't make yourself available and don't comment. That's basically what the paper's management was saying.

What emerged from the editing, by the law firm, was a story about a subdivision which had a bunch of empty houses and high weeds. A bare passing reference to a possible FBI probe, but no mention of who or why this had come about. They ran from that story like it was a bag of anthrax

Because he lied to me, refused to call me back, Kurt Heintz escaped the publicity he so richly deserved last summer. Only when the local television station WJRT-TV, Channel 12 began pursuing the story (after I left with my buyout) did the Journal grudgingly start following the story of Mr. Heintz.

That coverage came about because an angry investor stabbed Mrs. Heintz sometime in December in the same home where I had confronted him and her. Mr. Heintz was interviewed the night of the stabbing, and yep, it was the same guy who told me that "Mr. Heintz" was not home. Someone called me from the paper and asked if I still had my documents. I won't say here what I wanted to tell them.

Just Friday, my former colleague Bryn Mickle (who should demand to be paid by the story considering the number of recent bylines of his I have noted) apparently caught up with the indictment of Mr. Heintz and the fact he may be on the hook for as much as $20 million in fraudulent loans. No offense to Mickle, but we could have told that story last August with just a little bit of nerve from the folks who call themselves leaders at the Journal.

But then I have heard a theory about why my story never saw the light of day back then. This is not my theory, but I have to admit it makes a lot of sense.

The theory: My work on the Great Lakes case came just months after another similar type of investigative reporting blew up in the paper's face.

That story had to do with a building company - Son Rise - and some difficulties and defaults that company had run into. A business reporter set out to tear into it, but in the end there were so many errors in the story that in one of the most embarrassing and bizarre situations, the paper allowed the owner of Son Rise a free shot in a front page, unedited rant against the newspaper.

Don't take my word for it, here's what the Columbia Journalism Review wrote:

Now mind you, a few days before the Sunday front page rant, the top editor called us all together in the newsroom to explain ahead of time what the paper was doing.

He started his explanation by absolving the reporter of any blame and said he did not believe the paper did anything wrong and that he still believed the story was solid. But went on to explain that the Journal's lawyers (read: real editors) believed it was the best way out of the situation.

Image this, we were being told we didn't do anything wrong, but to avoid a lawsuit we were turning our front page over to an angry story subject. I had never seen anything like it before, or since.

Any intelligent person would ask, if you didn't do anything wrong and the story was solid, why would you turn over your front page to anyone. But turn it over we did. Many of us viewed it as throwing the reporter under the bus.

But back to my Great Lakes story. The theory goes that after such a bad experience that, the editor no longer had the spine to push against another developer or mortgage broker no matter how solid the reporting.

When newspapers, or any media, loses its nerve to push against those who are doing wrong, then they are useless. Most of us got into this business to "comfort the afflicted and afflict the comfortable." (That is certainly not an original quote from me, but I have always lived by that).

So to all those wonderful Davison Township residents who helped me pursue Mr. Heintz and his scam last summer, your story is finally out, but with no thanks to the timid boss or lawyers at the Flint Journal.

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