Federal Task Force Arrests 485 for Mortgage Fraud

The U.S. Department of Justice on Thursday announced the results of the largest mortgage fraud sweep in history.

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Since the nationwide crackdown began in March, Feds have gone after 1,215 criminal defendants, who are allegedly responsible for more than $2.3 billion in losses, and made 485 arrests -- and as ""DSNews.com previously reported"":http://dsnews.comarticles/fbis-mortgage-fraud-crackdown-expected-to-yield-hundreds-of-arrests-2010-06-14, they are planning to add hundreds more to that list over the next few weeks.

The administration's war on mortgage fraud, dubbed _Operation Stolen Dreams_, is an interagency effort of the Financial Fraud Enforcement Task Force, organized by President Obama last November. It involves the Federal Bureau of Investigation (FBI), U.S. attorneys offices, the U.S. trustee program, HUD, Treasury, the Federal Trade Commission, and the IRS, among others.

Unlike previous mortgage fraud sweeps, _Operation Stolen Dreams_ focused not only on federal criminal cases, but also on civil enforcement, recovering money for victims and increasing cooperation with state and local partners.

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In addition to the arrests made, the Justice Department says to date, the operation has resulted in 191 civil enforcement actions and the recovery of more than $147 million.

At a news conference in Washington touting the interagency effort, Attorney General Eric Holder said, ""Let today's takedown send a strong message to any would-be fraudsters: If you prey on vulnerable homeowners or engage in fraudulent conduct, we will find you and we will bring you to justice. You will pay for your schemes.""

Holder says the staggering totals from this sweep highlight the mortgage fraud trends the task force is seeing around the country. As the housing crisis set in, scammers have honed in to take advantage of a deteriorating situation and individuals in distress.

According to Holder, mortgage fraud has taken on all shapes and sizes â€" from schemes that ensnared the elderly to fraudsters who targeted immigrant communities. He says he’s seen single cases that have resulted in dozens of foreclosures and millions in losses, as well as fraudsters who have bankrupted entire companies, national lenders who were not playing by the rules, and straw buyer schemes initiated by struggling builders.

“The list goes on and on. The breadth of the fraud is truly astonishing,” Holder said.

Officials say this takedown is just the latest effort in their ongoing fight. The Justice Department has requested $178 million of its 2011 budget to be earmarked for mortgage fraud, an increase of nearly $19 million from allocations made this year.

The FBI currently has over 3,000 pending mortgage fraud cases, almost double the figure for all of 2008.