Feds Ongoing Crackdown on Mortgage Fraud Nets $147 Million in Recovered Funds

The U.S. Justice Department’s three-month crackdown on mortgage fraud has netted the government $147 million in recovered funds – just a small dent in the total nationwide criminal scams so far totaling $2.3 billion.


Since March, when ‘Operation Stolen Dreams’ began, the Feds have gone after 1,215 criminal defendants, made 485 arrests and filed 191 civil enforcement actions.


The FBI currently has over 3,000 pending mortgage fraud cases, almost double the figure for all of 2008.


It is the largest mortgage fraud sweep in U.S. history, according to the Justice Department.


Attorney General Eric Holder told a media conference his department’s moves against criminal and civil suspects are only beginning.


“Let today’s takedown send a strong message to any would-be fraudsters,” Holders said. “If you prey on vulnerable homeowners or engage in fraudulent conduct, we will find you and we will bring you to justice. You will pay for your schemes,” DSNews.com reported.


Holder says the staggering totals from this sweep highlight the mortgage fraud trends the task force is seeing around the country. As the housing crisis set in, scammers have honed in to take advantage of a deteriorating situation and individuals in distress.


The administration’s war on mortgage fraud is an interagency effort of the Financial Fraud Enforcement Task Force, organized by President Obama last November.


It involves the Federal Bureau of Investigation (FBI), U.S. attorneys offices, the U.S. trustee program, HUD, Treasury, the Federal Trade Commission, and the IRS, among others.


Unlike previous mortgage fraud sweeps, Operation Stolen Dreams focused not only on federal criminal cases, but also on civil enforcement, recovering money for victims and increasing cooperation with state and local partners, according to DSNews.com.


According to Holder, mortgage fraud has taken on all shapes and sizes – from schemes that ensnared the elderly to fraudsters who targeted immigrant communities.


He says he has seen single cases that have resulted in dozens of foreclosures and millions in losses, as well as fraudsters who have bankrupted entire companies, national lenders who were not playing by the rules, and straw buyer schemes initiated by struggling builders.


“The list goes on and on,” Holder said. “The breadth of the fraud is truly astonishing,”


Officials say this takedown is just the latest effort in their ongoing fight. The Justice Department has requested $178 million of its 2011 budget to be earmarked for mortgage fraud, an increase of nearly $19 million from allocations made this year.


Published on 21/06/2010 13:07:33