Financial Fraud Enforcement Task Force Hosts Mortgage Fraud Summit in Miami

WASHINGTON—Representatives of the Financial Fraud Enforcement Task Force met in Miami today for the first of a series of Mortgage Fraud Summits. The task force, established by President Barack Obama in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes, is composed of representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement.

The first summit was held in Miami because of the high rate of mortgage fraud in the region. The Miami-Fort Lauderdale-Pompano Beach metropolitan area is ranked first in the nation for the number of local subjects named in Suspicious Activity Reports (SARs) filed by depository institutions concerning suspected mortgage fraud, according to a recent Financial Crimes Enforcement Network (FinCEN) study. And according to FinCEN data, Florida has consistently ranked second in the nation for mortgage fraud SARs, only behind California.

Sharon Ormsby of the FBI's Financial Crimes Section addresses members of the Financial Fraud Enforcement Task Force at the summit in Miami.

Today, the task force members met with Miami community members, banking, mortgage, and real estate industry representatives and law enforcement officials to discuss the problem of mortgage fraud from a national, state and local perspective. In the morning, attendees participated in panels on the community impact of mortgage fraud and the evolution of the crisis. In the afternoon, task force representatives will meet privately with law enforcement officials involved in the investigation of mortgage fraud.

“This task force has a straightforward mission: To protect families against financial fraud and restore the confidence of consumers in our markets,” said Assistant Attorney General for the Civil Division Tony West. “We will hold accountable not just those responsible for the corporate fraud that created our current financial crisis, but those responsible for the financial fraud that affects too many working families, like mortgage fraud and lending discrimination. And by holding these people accountable, we will seek to prevent another meltdown from happening again.”

“The mortgage fraud crisis cannot be ignored. Mortgage fraud puts lenders at risk, and forces homeowners to confront the real possibility of foreclosures, or worse, the loss of their homes,” said U.S. Attorney for the Southern District of Florida Jeffrey H. Sloman. “Nowhere is the problem more serious than here in Florida. Since September 2007, our mortgage fraud initiative has resulted in the prosecution of 282 individuals at all levels of the mortgage process, resulting in more than $343,669,434 in fraudulent mortgage loans. We will continue to do our part to investigate and prosecute these fraudsters, in the hopes of stemming the tide of fraud that has swept the mortgage industry.”

“Different parts of the country experience mortgage fraud in different ways. We are here in Miami, in part, to learn about the nature of the problem and the enforcement efforts to date in this region, so that we can determine how best to facilitate enforcement efforts nationally,” said U.S. Attorney for the Eastern District of California Benjamin B. Wagner. “This summit is the first of at least three similar summits that the Mortgage Fraud Working Group will be holding around the country. We hope to gather more information about the nature of the problem in different regions and help coordinate an effective law enforcement response.”

“The HUD OIG helped craft into legislation last year a penalty of up to 30 years in prison and $1 million in fines for committing FHA fraud,” said Inspector General of the Department of Housing and Urban Development Kenneth M. Donohue. “The OIG, working with U.S. Attorneys across the country, will endeavor to use these new penalties to prevent and confront fraudulent activities. We will use any means at our disposal, whether criminal, civil, or administrative, to stop those who are impacting the soundness of HUD’s FHA program at such a critical time.”

“The mortgage fraud crisis in Florida is similar to a state of emergency, and Florida Attorney General Bill McCollum knows we have to take an all-hands-on-deck approach to effectively address our citizens' concerns. The Florida Attorney General's Office will continue working with its federal, state, and local partners to protect homeowners from mortgage fraud and foreclosure rescue and loan modification scams. Everyone must work together if we are going to make a difference,” said Regional Deputy Attorney General Cynthia Guerra.

“As long as criminals are out to make a quick buck by preying on homeowners and lenders, we will continue to work side-by-side with our partners to protect the American dream for years to come and ensure that criminals who try to enrich themselves through mortgage fraud schemes are brought to justice,” said FBI Deputy Assistant Director for the Criminal Investigative Division Karen Spangenberg.

Also participating in the summit were the Executive Director of the Financial Fraud Enforcement Task Force Robb Adkins, FinCEN Director James H. Freisa, Jr., and representatives from the U.S. Secret Service, Federal Deposit Insurance Corporation, and the Miami-Dade Police Department. The Miami summit is the first in a series of meetings to occur in the coming months, with additional dates and locations to be announced.

Mortgage fraud is a key focus of the Financial Fraud Enforcement Task Force’s efforts. 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.