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FBI Nails 400 Mortgage Fraudsters

Written By Brian Hicks

Posted June 19, 2008





With the housing market now a smoking ruin, the Feds have had their hands full lately with mortgage fraud.

But the wheels of justice are slowly turning as the Feds close in on housing crimes. And while it may not exactly be Bonnie and Clyde or Bin Laden, the dragnet is getting tighter.

Here’s an update on what the G-men have been up to lately. 

From Bloomberg by Robert Schmidt entitled: U.S. Charges 400 in Mortgage Frauds, Justice Department Says

“More than 400 people have been charged in a federal roundup targeting mortgage fraud, the Justice Department said.

FBI Director Robert Mueller and Deputy Attorney General Mark Filip will announce the national crackdown, dubbed Operation Malicious Mortgage, this afternoon in Washington. Nearly 300 people have been arrested thus far in cities ranging from Chicago to Dallas to Miami, department officials said.

The sweep began in March and authorities estimate that victims lost more than $1 billion as a result of the frauds, which include schemes to cheat lenders, rip-off people facing foreclosure and the filing of fraudulent bankruptcy claims. Targets include real-estate agents, lawyers, appraisers and borrowers.

“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,” Filip said in a statement.

Also today, two former Bear Stearns Cos. hedge-fund managers were arrested at their homes after being indicted by a federal grand jury in Brooklyn. They face conspiracy, wire fraud and securities fraud charges for their roles in the collapse of hedge funds that helped ignite the subprime meltdown.

The Federal Bureau of Investigation has opened more than 1,300 mortgage-fraud cases, many related to subprime loans made to people with poor credit. The credit collapse has forced hundreds of thousands of people from their homes because of foreclosures and triggered almost $400 billion in losses and writedowns on Wall Street.

The FBI has struggled to keep pace with the growing number of mortgage cases and earlier this month ordered 26 field offices to stop opening some financial fraud investigations so its agents could focus on the subprime crisis.”

I wonder if Angelo Mozilo is starting to get nervous yet.