Authorities arrested 485 people since March in the largest nationwide mortgage-fraud crackdown of its kind, the U.S. Justice Department said.
During the enforcement effort, 1,215 criminal defendants responsible for $2.3 billion in losses faced some type of legal action, the department said. The crackdown, dubbed Operation Stolen Dreams, also included 191 civil cases resulting in the recovery of more than $147 million.
“This represents the largest collective enforcement effort ever brought to bear in confronting mortgage fraud,” said Attorney General Eric Holder at a news conference in Washington. “These schemes are despicable, they are dangerous to our economy and they will not be tolerated.”
The initiative was organized by President Barack Obama’s financial fraud task force. The Federal Bureau of Investigation has more than 3,000 pending mortgage-fraud cases, almost double the number in fiscal year 2008, Holder said.
Authorities in Miami arrested two people who allegedly targeted the Haitian-American community, sometimes claiming they would help on immigration and housing matters and instead using victims’ information to create fake documents to obtain mortgages, Holder said.
In Detroit yesterday, several people were charged in a $100 million “ghost loan” scheme in which suspects posed as mortgage brokers, appraisers and real estate agents and used straw buyers to obtain 500 mortgages on 180 properties, Holder said.
Federal officials in New Jersey yesterday announced criminal complaints charging 28 people with participating in mortgage scams that sought to defraud lenders out of more than $5.5 million. Among the defendants were real estate agents, investors and mortgage consultants, according to a statement from the FBI and U.S. Attorney Paul Fishman.
A Queens, New York man pleaded guilty to leading a $10 million scheme that defrauded mortgage lenders. Sharmon Howell, 36, today admitted in U.S. District Court in Manhattan that he headed a ring that recruited straw buyers to purchase homes and obtained more than two dozen fraudulent loans, according to prosecutors.