Larry Maxwell Mortgage Fraud Case: "The State, Thankfully, Rests Its Case" And Talk Of A Widening Fraud Investigation

Photo By John Hoff

This is a thumbnail summary with, hopefully, a much more detailed account to follow later.

The prosecution in the Larry Maxwell mortgage fraud wrapped up yesterday with the words, "The state, thankfully, rests its case." This utterance by prosecutor Brad Johnson emitted laughter from a jury that has been on duty for something like five weeks, and is so clearly leaning against the defendant that it seems Larry Maxwell doesn't dare to...

...even LOOK in their direction.

Defense attorney Larry Reed put his first witness on the stand, but not until a long conference outside the presence of the jury in which Judge Chu seemed to strongly rebuke Reed in regard to lack of adequate notice to the prosecution over lack of timely notice to the prosecution in regard to the witness schedule.

Ricky Frey, a former employee of Worldlink, and now an employee of Detail Mortgage, took the stand after an elaborate and somewhat chilling Fifth Amendment ritual in which he was warned anything he said could be used against him. Outside the view of jury and witnesses, Prosecutor Brad Johnson told Judge Chu the state views Frey as "a co-conspirator of Mr. Maxwell," saying "there is an investigation into Frey, this extends to Design Mortgage."

This drew a sharp response from defense attorney Larry Reed, who said this was the first he was hearing of any such investigation into Frey.

Frey endured only brief questioning from defense attorney Larry Reed, then on cross examination was approached by Brad Johnson, who began offering up one document after another, including some pretty fat checks from Larry Maxwell which Frey visibly, painfully struggled to explain away as "bonuses" for stuff like "working nights and weekends."

Frey admitted when a home buyer appears at closings with two different names--as was the case with Tyrone Williams--well, something is clearly wrong with this picture. Frey admitted an incriminating document "might" be in his handwriting. Maybe. Could be. The document was admitted into evidence, over the vigorous objections of defense.

When asked to "tell the jury" his answer to a particular quesiton, Ricky Frey did not turn toward the jury, but instead kept looking straight ahead. It was my distinct impression the jury did not find Frey creditable within the first five minutes of testimony.

Frey--who has the barrel-like build of a barroom bouncer, yet projects very little confidence on the stand, appears to have walked right into a trap. Though Frey was sprung upon the prosectuion after a vigorous game of "shuffle the witnesses," still prosecutors "Johnson and Johnston" seemed well-prepped with a methodical sequence of documents and questions. One had the impressions of dotted lines being drawn on a side of beef, with sharp carving knives waiting in the wings.

FYI, Frey's last name does indeed appear to be pronounced like "fry."

This mortgage fraud fun appears poised to continue for at least another week. Today, Judge Chu announced she would be cancelling her scheduled surgery in favor of continuing the trial, as long as the surgeon was able to fill his schedule with another patient. Also, a juror with a bad back complained of his legs swelling up, asking for an opportunity to elevate his feet. Chu made arrangements to help the juror.

Today, a local lawyer told me Larry Maxwell is an excellent example of a defendant who should have pled guilty, but instead has "put the state to its proof."

There is a bright spot in all of this, however: Larry Maxwell's mother is prepared to take the stand as a defense witness.

It kind of gives you hope for the human race.