Over 40 task forces of federal investigators along with state and local law enforcement agencies have completed their third nationwide sweep in an effort to detect and lock up mortgage fraudsters. The sweep known as “Operation Malicious Mortgage” has led to the arrest of over 400 individuals throughout the US on mortgage fraud charges.
Two Bear Stearns portfolio managers, Ralph Cioffi and Mathew Tannin are among the 400 facing charges for their misrepresentations of funds to investors. Cioffi and Tannin were charged with conspiracy, securities fraud and wire fraud. Cioffi was also charged with insider trading.
19 sub-prime related corporate fraud investigations are among the FBI’s mortgage fraud cases. “Most of these corporate fraud investigations,” said FBI Director Robert Mueller, “deal with accounting fraud, insider trading, and with criminal intent, the failure to disclose the proper valuations of the securitized loans and derivatives.”
From January of 2007 to April of 2008 the FBI has convicted 382 individuals on mortgage fraud related cases. Among the 400-plus subjects of Operation Malicious Mortgage, there have been 173 convictions and 81 sentencings so far for crimes that have accounted for more than $1 billion in estimated losses.
Over the past three years the FBI’s mortgage caseload has more than doubled to 1,400 cases and is expected to continue to grow. “The FBI recognizes these Corporate Fraud cases will increase in numbers due to an enhanced level of regulatory and internal audit reviews by many of these Wall Street Firms, and we will address these cases as they are identified,” said Mueller.
Department Of Justice Deputy Attorney General Mark R Filip, who also attended the press conference, stated “Mortgage fraud poses 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. Our investigation and prosecution of these crimes will continue as we work with other federal and state agencies to restore stability and confidence in our nation’s housing and credit markets.”
Get the latest mortgage news by visiting Future Planning Financial at www.fpf-direct.com.
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