Category: Mortgage Fraud

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DOJ Indicts Seven Defendants in $49.6 Million Mortgage Fraud Scheme

On January 10, 2014, representatives of the United States Attorney for the Southern District of Florida, the Federal Bureau of Investigation, and the Inspector General’s Office for the Federal Deposit Insurance Corporation announced the unsealing of a 15-count indictment against seven defendants allegedly involved in a complex mortgage fraud scheme. According to the announcement, the indictment involves lender … Continue Reading

DOJ Announces Results of Financial Fraud Task Force’s “Operation Broken Trust”

On December 6, 2010, Attorney General Eric Holder announced the results of "Operation Broken Trust," a nationwide law enforcement effort formed by the Financial Fraud Enforcement Task Force to investigate investment fraud.  Holder said in a press release: With this operation, the Financial Fraud Enforcement Task Force is sending a strong message.   To the public: be … Continue Reading

TARP Inspector General Report Touts Mortgage Fraud Investigations reports that the July 21, 2010 quarterly report issued by the Office of the Special Inspector General for TARP (SIGTARP) highlights that office’s efforts to prosecute mortgage fraud.  The report touts SIGTARP’s investigative unit, which Special Inspector General Neil Barofsky said in his report has turned into a "sophisticated white collar investigative agency."  The report also highlights the government’s June 2010 bust … Continue Reading

Mortgage Fraud Losses Continue to Mount for Financial Institutions

A February 16, 2010 report  released by the U.S. Federal Financial Institutions Examination Council (FFIEC) confirms that financial institutions continue to suffer mortgage-fraud related losses.  The council, which is comprised of the U.S. Federal Reserve, the Federal Deposit Insurance Corp., the National Credit Union Administration, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and … Continue Reading

Madoff Accountant Pleads Guillty to Fraud

The New York Times reports that  Bernard. Madoff’s longtime accountant pleaded guilty to three counts of obstructing the administration of the federal tax laws carrying a prison sentence of up to 114 years .  The accountant, David G. Friehling, admitted that for nearly 20 years he had "rubber-stamped" audits that allowed Madoff to conceal his  Ponzi scheme from regulators.  Friehling essentially conceded … Continue Reading

MERS, Interthinx to Collaborate on Mortgage Fraud Database

On October 12, 2009, MERSCORP, Inc. (MERS) and Interthinx announced the launch of a national fraud prevention database that will help lenders seek, identify, and share suspected fraudulent activity in loan applications from the point of origination. MERS FraudALERTSM, powered by Interthinx, will allow lenders to identify potential mortgage fraud through the sharing and reporting of data among … Continue Reading

Feds and States Create Mortgage Fraud Task Force

A group of federal agencies and state attorneys general announced the formation of a new task force aimed at fighting mortgage fraud, according to a New York Times report.   The new task force includes the Treasury Department, Justice Department, Federal Trade Commission and Department of Housing and Urban Development, as well as attorneys general of some of … Continue Reading

Sentencing Pending for Former Florida Judge After Guilty Plea for Mortgage Fraud

A former Florida appeals court judge pleaded guilty to defrauding a bank that loaned him money to purchase a residence in Hawaii and is now awaiting sentencing.  Criminal charges alleged that Thomas Stringer, a former judge in the Florida Second District Court of Appeals, falsified his mortgage application by falsely stating that he had not borrowed any funds used for … Continue Reading

FBI Report: Mortgage Fraud Increased in 2008

According to a new FBI report , mortgage fraud increased considerably in 2008.  Relying on Suspicious Activity Reports from financial institutions, the report cited a 36 percent increase in mortgage fraud compared to 2007, with losses of over $1.4 billion.  During the first six months of 2009, losses already exceed all of 2008 by $208 million.  The report links the increase in … Continue Reading

SEC and FINRA Sue Brokers for Alleged Mortgage Backed Securities Fraud

The SEC and Financial Industry Regulatory Authority (FINRA) filed separate lawsuits alleging that 16 brokers from the now defunct Brookstreet Securities Crop. fraudulently mislead investors that derivatives based on mortgage-backed securities were safe and conservative investments.  In its complaint, the SEC alleges that 10 Brookstreet brokers failed to inform customers about the risks associated with investing in collateralized mortgage obligations.  The brokers portrayed … Continue Reading

Obama Signs Bill to Combat Mortgage and Financial Fraud, Creates Commission

In the wake of the subprime crisis and mortgage meltdown, on May 20, 2009, President Obama signed The Fraud Enforcement and Recovery Act ("FERA").  Among other provisions, the new law provides federal law enforcement with additional resources to combat mortgage and financial fraud, and authorizes federal prosecutors to prosecute anyone who fraudulently obtains funds under the American … Continue Reading

SEC Recommends Civil Fraud Charges Against Countrywide’s Mozillo

The Los Angeles Times reported on May 14, 2009 that SEC investigators had recommended the filing of civil fraud charges against former Countrywide chief executive Angelo Mozillo.  According to the article written by E. Scott Reckard and William Heisel, persons familiar with the matter report that SEC staff are seeking approval to file fraud charges that … Continue Reading

House Approves Mortgage Fraud Bill

  On May 6, the House of Representatives voted overwhelmingly to pass, with amendments, a Senate bill to improve enforcement of securities fraud, financial institutions fraud and mortgage fraud.  The bill also addresses fraud related to federal assistance and relief programs.  According to a summary of the bill posted on the CCH Financial Crisis News Center, the Fraud Enforcement … Continue Reading

Mortgage Lenders Fight Back, Use RICO Claim to Recoup Fraud Losses

A novel lawsuit brought in federal court in Seattle by Wilmington, Del. based ING Bank alleges that over 20 individuals and companies violated the Racketeer Influenced and Corrupt Organizations Act ("RICO") by running a complex mortgage fraud scheme that resulted in the origination of over $6 million of mortgages.  The defendants named in the federal Civil RICO lawsuit include a mortgage broker, an … Continue Reading