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Financial Fraud Enforcement Task Force Announces Regional Results of “Operation Stolen Dreams” Targeting Mortgage Fraudsters

U.S. Attorney’s Office June 17, 2010
  • Southern District of Indiana (317) 226-6333

INDIANAPOLIS—Following an announcement today by Attorney General Eric Holder in Washington, DC, representatives of the Financial Fraud Enforcement Task Force in Indianapolis, including U.S. Attorney Timothy M. Morrison, Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation Division, announced the regional results of the nationwide takedown, Operation Stolen Dreams, which targeted mortgage fraudsters in the Southern District of Indiana and throughout the country and is the largest collective enforcement effort ever brought to bear in confronting mortgage fraud.

The sweep was organized by President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on March 1, to date Operation Stolen Dreams has involved 1,215 criminal defendants nationwide, including 485 arrests, who are allegedly responsible for more than $2.3 billion in losses. Additionally, to date the operation has resulted in 191 civil enforcement actions which have resulted in the recovery of more than $147 million.

“Mortgage fraud ruins lives, destroys families and devastates whole communities, so attacking the problem from every possible direction is vital,” said Attorney General Holder. “We will use every tool available to investigate, prosecute, and prevent mortgage fraud, and we will not rest until anyone preying on vulnerable American homeowners is brought to justice.”

“Since 2002, in the Southern District of Indiana, more than 72 persons have been convicted in mortgage fraud schemes, resulting in more than $93.1 million in ordered restitution,” said U.S. Attorney Morrison. “Sixty-one persons received prison sentences averaging over 31 months, and those included mortgage brokers, appraisers, loan officers, closing agents and realtors.”

Earlier in 2010, in the Southern District of Indiana, Robert Penn and seven other defendants were sentenced to terms of imprisonment between 24 and 84 months following the successful prosecution of a $16.6 million dollar mortgage fraud scheme. In February, 2010, Beverly A. Ross was sentenced to 63 months imprisonment for a mortgage fraud scheme involving 34 properties at a loss to lenders of $5.6 million.

“Mortgage fraud is the FBI’s highest financial crime priority. Mortgage fraud is a ruinous blight on communities, the banking industry, and the nation as a whole. The FBI will continue to utilize our financial investigative expertise to address the mortgage fraud problem within the real estate industry. The FBI is committed to pursuing those individuals who have manipulated the mortgage loan process for their own financial gain. While these investigations are lengthy and complicated, the FBI will continue to work with our law enforcement partners to ensure that the individuals who commit mortgage fraud are investigated and prosecuted,” stated Michael Welch, Special Agent in Charge of the FBI in Indiana.

Al Patton, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, Chicago Field Office stated that, “These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, leave lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties. IRS CI is committed to applying their financial expertise and pursuing individuals who create such havoc.”

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

The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit StopFraud.gov.

There are a number of federal, state and local agencies who have partnered together to combat mortgage fraud. Most recently, in the Southern District of Indiana, that includes the Internal Revenue Service, Criminal Investigation Division, the Federal Bureau of Investigation, the United States Trustee, Region 10, the Indiana Attorney General’s Office, Homeowner Protection Unit, the Indiana Secretary of State’s Office Prosecution Assistance Unit, as well as the Hamilton County Sheriff’s Department, the Richmond Police Department and the Hamilton County Prosecuting Attorney.

Operation Stolen Dreams cases in the Southern District of Indiana included:

United States vs. Kathy Puckett

Charged May 19, 2010, with mail fraud and obstructing justice, Puckett was co-owner of Richmond Mortgage and served as its mortgage broker. The information alleges that Puckett submitted false information to the lenders, including false verification of employment, inflated account balances and credit scores. Loss to the lenders is alleged to exceed $200,000.

United States vs. Amanda Burroughs

Under the name WWL & Co., Amanda Burroughs was in the business of purchasing distressed homes, improving them and selling them for profit. Between May, 2005 and February, 2008, Burroughs allegedly began to conceal from lenders the source of her buyers’ downpayment money in order to induce the lenders to loan to buyers who would otherwise not qualify for loans. WLL would receive money at each closing from the sale of these properties, many of which went into foreclosure. Lenders purportedly lost $385,000 in the scheme.