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DOJ Recommits to Mortgage Fraud Prosecution
July 5, 2010
by K. McKinney
Tampa Bay – and the rest of the country – should probably ready itself for another round of federal mortgage fraud prosecutions. A few weeks ago, in late June, 2010, U.S. Attorney General Eric Holder announced yet another coordinated task force addressing the mortgage fraud issues that abounded during the real estate boom, which is now several years past, but are continuing today as people try to maneuver out of unfortunate financial situations.
Holder announced the results of Operation Stolen Dreams – a three and a half month takedown of mortgage fraud schemes throughout the country. Beginning on March 1, 2010, Operation Stolen Dreams has involved over 1,200 criminal defendants who were allegedly responsible for more than $2.3 billion in losses. In addition, the operation involved 191 civil enforcement actions through which more than $147 million has been ordered recovered, with still millions more pending court approval.
In addition to several other cases, the AG spotlighted a case filed in Miami against two defendants who allegedly targeted the Haitian-American community, claiming they would assist them with immigration and housing issues, but then instead using victims’ personal information to produce false documents to obtain mortgage loans.
Another case mentioned was that of a home builder who allegedly used straw buyers to sell his inventory of unsold houses at inflated prices with undisclosed sales rebates. This scheme inflated prices on other homes in the area, creating artificially high comparable sales and affecting the overall new-home market.
Operation Stolen Dreams is operated under the umbrella of the President’s Financial Fraud Enforcement Task Force, launched last November. The Department of Justice has requested $178 million in its fiscal year 2011 budget to fight mortgage fraud, an increase of over $18.4 million. The FBI has over 3,000 pending mortgage fraud cases, almost double the figure from fiscal year 2008. The task force is also reportedly working with consumer groups to increase financial literacy and better educate homeowners about warning signs of scams.
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