Tampa’s U.S. Attorney Brian Albritton expects to see ten times more mortgage fraud prosecutions in his office in the next year. Albritton told local media that his office is helping coordinate a large-scale multiagency task force that plans to bring more than 100 mortgage fraud cases by the end of 2009.

Albritton said he is requiring each of the 105 federal prosecutors in the Middle District of Florida to take on a mortgage fraud case on top of his or her normal workload.

The task force will seek out people involved in all different aspects of mortgage fraud. They expect that “straw purchasers” will make up the bulk of the early prosecutions. A “straw purchaser” is someone who is paid by a property flipper to apply for a mortgage, using an inflated property value for a home. The flipper pays off his own mortgage on the property (for the true value of the home) and keeps the difference between the true value and the inflated value. The “straw purchaser” makes a few thousand dollars and never pays the mortgage, allowing it to be foreclosed.

Authorities then plan to use information from these lower-level defendants to pursue corrupt real estate professionals and even questionable lenders. This means that federal prosecutors will be negotiating with the early defendants and their criminal defense attorneys to exchange information and testimony for a plea deal.

Florida ranks second, behind Rhode Island, in the rate of mortgage fraud around the nation.

White Collar Crimes

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