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A reporter’s testimonial

A reporter’s testimonial- Daugherty helped uncover mortgage scam


The realtor’s efforts kept more than 300 people in their homes, including children and senior citizens.

Bill Daugherty died Wednesday; I didn’t know until Friday morning, when I read his obituary in the paper. I’m 48 years old, and I wept. Well, that’s understating it: I cried like a baby.

Bill’s family was far too modest when submitting the obituary, which reported he was “instrumental in discovering the home improvement scam in Oil City” and helped “prevent or reverse a large number of foreclosures.”

Here’s the simple math: Bill’s efforts kept more than 300 people in their homes, including scores of young children and senior citizens in their 70s and 80s. His work resulted in the ultimate discovery that at least 17 lenders potentially had underwritten fraudulent notes totaling more than $50 million.

Millions of dollars were returned to homeowners either in the form of mortgage forgiveness or restructured loans.

Bill worked day and night to expose the corruption.

Though he never mentioned it, I’m sure he had concerns about his safety. You just don’t do something like this and not start looking over your shoulder. Bill was under enormous pressure from some members of the real estate fraternity to – how should I put this? – unlearn what he already knew.

But Bill Daugherty did not bail on the people of Venango County. His steadfastness resulted in the investigation widening from a common probe of home-improvement contractors to an intense examination of the lending business itself. Agents from various state and federal agencies were practically tripping over each other for months in the search for a truth buried in thousands of loan documents archived in the Venango County Courthouse and in bank vaults across the U.S.

Bill not only stood up to the pressure but was relentless in the face of it. An appraiser from a southern county who’d traveled to Venango and produced a number of jobs that resulted in foreclosures insisted to authorities that Bill had gotten it all wrong, that the appraisal math could be explained in a rational way.

This appraiser, who later was implicated in the scam, then tried to orchestrate a smear campaign against Bill. What the appraiser didn’t know was that Bill was a researcher without peer and had personally trained a newspaper reporter on how to do complex real-estate and financial research and how to ask the “right” questions.

Those questions resulted in the publication of more than 150 stories in The Derrick and The News-Herald. These led to wide-ranging state and federal investigations, court documents that read like pulp fiction because the set of circumstances did not enable a skeptical public to suspend its disbelief, and the ultimate filing of criminal charges.


Want to know what pressure is? Pressure is when you find yourself involved in a story that names banks and lending companies and individuals who have a lot more money than you do. Pressure is when you find yourself reporting that a dead man’s signature was forged on loan documents, that a collection company threatened to repossess a dog that had been acquired as part of a real-estate deal, that one of the principals in the case used one name on some sales calls and a different name on others.

And pressure is when you’re doing all of these things before charges have been filed.

Relief comes only when authorities verify what you’ve reported and guilty pleas are extracted. Only then can a skeptical public suspend its disbelief.

Thanks to Bill Daugherty, three companies and their owners were banned for life from doing business in Pennsylvania. At least three notaries public who’d affixed their seals to bogus transactions were disciplined by the state.

Meanwhile, at least four real-estate appraisers lost their licenses. The heads of one of the firms involved in the scam, went to prison.

How much did Bill make as a result of his behind-the-scenes efforts to expose this corruption?

Zero. Not one thin dime. He saw it as his public duty, his duty to a self-policing trade whose viability depends on integrity. Bill Daugherty honored his commitment to his community and his profession.

By the time the mortgage scam came to light, Bill already was famous for keeping long work hours. But in the weeks and months that followed, he super-sized something that already was super-sized. I talked with him daily back then, often at 6 a.m., often at 10 p.m. – 16 hours later on the same day.

Bill sat in his office, crunching numbers, thinking about fleeced widows, meeting with investigators, suppressing his contempt for corrupt members of his noble trade who’d visited such destruction on Venango County.

“Can you believe it,” he said to me, holding a sheath of papers in the air. “This appraisal is 400 percent higher than it should be.”

He found one case in which a $10,000 home had been appraised for $100,000, a mind-boggling 1,000 percent markup – all part of a monumental deception to enable a corrupt appraiser to collect $300 fees and a corrupt broker to massage his ego by acquiring expensive toys.

The government now owns a Rolls-Royce, a rather expensive toy, one acquired in part on the backs of Venango County widows trying to stave off foreclosure by playing a shell game with their meager Social Security checks.

How bad did things get? In one case, an Oil City widow awoke on Easter Sunday morning to discover it was raining in her bedroom because roofers took her money without doing adequate repairs. The loan “contract” was “signed” by her husband on the day after his death

In another case, a woman was hounded by a bill collector who threatened to repossess her daughter’s miniature dachshund named Scooby-Doo.

Bill had met with an investigator during the very day I was doing the reporting for the Scooby-Doo story. Something unprecedented happened when the story ran in the newspaper the next morning.

The investigator called me at home and asked me to apologize to the woman on behalf of the agency. (At the time, I agreed not to disclose the name of the agent or the agency. I continue to honor this agreement.)

In May 2001, about a month after Bill exposed the scam and I began to report on it, then-Attorney General Mike Fisher filed the first of several lawsuits in the case.

This time, I held the sheath of papers in the air as I entered Bill’s office to tell him the news. As I sat and reflected on the events of the day, I peered at Bill and noticed he was wiping tears from his eyes.

I said, simply, “This happened because of you, Bill.”

Nothing else had to be said between two men who’d found themselves by happenstance immersed in the same filthy trench.

Bill guided me out of that trench. What’s more important is that he guided the victims back to the safety of their homes.

It is said that evil thrives when good men do nothing. The only thing that remains to be said is that Bill Daugherty was a good man who did something.