A year after “Operation Stolen Dreams” concluded tracking mortgage fraud nationwide, more than $3 billion in estimated losses resulted from this search, according to the Federal Bureau of Investigation.
The operation was the largest collective enforcement effort ever brought to bear in confronting mortgage fraud throughout the country. The Mortgage Fraud Working Group of President Obama’s interagency Financial Fraud Enforcement Task Force organized the operation, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.
Between March 1, 2010 and June 18, 2010, there were 1,517 criminal defendants nationwide involved in some type of mortgage fraud, resulting in 525 arrests. The operation also led to 191 civil enforcement actions and the recovery of more than $196 million.
“Mortgage fraud has cost the FHA program, borrowers, the American taxpayers and Michigan homeowners millions of dollars,” said HUD-OIG special agent in charge Breck Nowlin. “The successes of Operation Stolen Dreams and our continued pursuit of financial fraudsters highlights the tireless efforts of law enforcement to bring to justice those who seek to defraud desperate homeowners.”
Since the operation ended in June 2010, 30 individuals have either pleaded guilty or found guilty of federal offenses relating to mortgage fraud, resulting in 27 separate prison terms. The highest sentencing so far against a fraudster has been 108 months in prison.
Civil forfeitures imposed so far against the convicted fraudsters have totaled more than $1.5 million. In addition, 22 new indictments have been filed pertaining to mortgage fraud offenses, which involve millions of dollars of alleged loss.
The U.S. Attorney’s Office is also pursuing individuals who are defrauding senior citizens by stealing their equity from their homes through fraudulent Home Equity Conversion Mortgages, which are FHA-insured reverse mortgages. Federal, state and local law enforcement agencies meet regularly with regulators, real estate professionals, victim rights organizations and lenders to investigate the latest fraud trends to avoid another crisis in the real estate market.
“Mortgage fraud, like all financial crimes, threatens the financial health of our communities, victimizing everyone from low-income families to lenders and investors,” said Erick Martinez, a special agent in charge. “IRS Criminal Investigation will follow the money and work with our law enforcement partners to collect the evidence needed to prove tax and money laundering violations, bring to justice those who create this havoc.”
