Task force targets mortgage, foreclosure scams
At a news conference recently in Dallas, government officials announced the Department of Justice's and FBI's latest national takedown of mortgage fraud schemes,the culmination of coordinated efforts to identify, arrest and prosecute mortgage fraud violations throughout the U.S., dubbed "Operation Malicious Mortgage."
It highlights the strong enforcement response undertaken to combat the threat mortgage fraud poses to the U.S. housing industry. Recently, 60 arrests were made in mortgage fraudrelated cases that charged conspiracy, bank fraud, wire fraud, money laundering, and engaging in a monetary transaction with criminally derived property.
Charges were brought in every region of the U.S. and in more than 50 judicial districts by U.S. Attorneys' Offices The FBI estimates that approximately $1 billion in losses were inflicted by the mortgage fraud schemes employed in these cases.
Operation Malicious Mortgage represents the joint collaborative efforts of the FBI, U.S. Postal Inspection Service, Internal Revenue Service-Criminal Investigation Division, U.S. Immigration and Customs Enforcement, U.S. Secret Service, U.S. Trustee Program, Department of Housing and Urban Development Office of the Inspector General, Department of Veterans Affairs Office of the Inspector General, and Federal Deposit Insurance Corporation Office of the Inspector General.
Operation Malicious Mortgage addresses primarily three types of mortgage fraud schemes: lending fraud, foreclosure rescue scams and mortgage-related bankruptcy schemes. Lending fraud frequently involves multiple loan transactions in which industry professionals construct mortgage transactions based on gross fraudulent misrepresentations about the borrower's financial status, such as overstating the borrower's income or assets, using false or fictitious employment records or inflating property values.
Foreclosure rescue scams involve criminals who target legitimate homeowners in dire financial circumstances and fraudulently collect fees for foreclosure prevention services or obtain ownership interests in residential properties. Both of these fraudulent mortgage schemes may be furthered by filing bankruptcy petitions that automatically stay foreclosure.
"Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation's housing market and to the peace of mind of millions of American homeowners," said Deputy Attorney General Mark R. Filip.
Since July 2002, the Department of Justice has obtained nearly 1,300 corporate fraud convictions, including the convictions of more than 200 chief executive officers and corporate presidents, more than 120 corporate vice presidents and more than 50 chief financial officers. An indictment is not evidence of guilt. All persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.
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