May 29, 2009
The FBI provides an assessment of the current mortgage fraud trends and actions the FBI is taking to investigate these crimes and protect the American public.
Mr. Schiff: Hello I’m Neal Schiff and welcome to Inside the FBI, a weekly podcast about news, cases, and operations. I’m sure you’ve heard about mortgage fraud. It’s happening all around the United States and the FBI is doing all it can to investigate these crimes.
Mr. Weber: “The FBI is investigating over 2,000 mortgage fraud cases across the nation.”
Mr. Schiff: That’s Brian Weber, a special agent and member of the FBI’s Mortgage Fraud Team. That 2,000 figure includes arrests made in Tennessee by the FBI, the Bedford County Sheriff’s Office, and the Internal Revenue Service (IRS). Four suspects in custody in connection with a multi-million dollar mortgage fraud operation involving hundreds of homes. There was a recent case out in the San Diego, California area where a gang member led a group of individuals into the mortgage fraud arena. Arrests were made of people for allegedly being involved in millions of dollars worth of fraud and racketeering operations.
Mr. Weber: “ Some of the charges these individuals are facing include wire fraud, bank fraud, and money laundering.”
Mr. Schiff: How much money was involved and how did this work? What were they doing to scheme and scam people?
Mr. Weber: “Well this was a large-scale case. It involved over 220 properties in California. The total sales price for all of these properties, which were purchased with fraudulent documentation, was over $100 million .”
Mr. Schiff: How did they do what they did?
Mr. Weber: “Essentially what they did in this case, and in similar cases, is allegedly they looked for properties that had been on sale on the open market for a substantial period of time. Those properties often had reductions in the original sales price. The individuals allegedly recruited straw buyers to purchase the properties for amounts substantially higher than the asking price through falsely inflated property appraisals. They then submitted false documentations, false loan applications, and false verifying documents in order to fraudulently obtain loans on the properties which, ultimately, foreclosed because payments weren’t made on the mortgages .”
Mr. Schiff: What agencies collaborated on this investigation?
Mr. Weber: “This case was investigated by agents from the FBI and Internal Revenue Service Criminal Investigation agents .”
Mr. Schiff: We asked Weber about the FBI’s National Mortgage Fraud Team.
Mr. Weber: “The National Mortgage Fraud Team is based here at FBI Headquarters. That team oversees the mortgage fraud investigations and other criminal actions across the country .”
Mr. Schiff: What is the FBI doing investigating these schemes and preventing people from becoming victims? I mean, this is a big problem, you said several thousand cases nationally?
Mr. Weber: “Yes, that’s correct. The FBI right now is investigating over 2,100 mortgage fraud cases. These are individual cases being investigated throughout the FBI at all of our field offices, and we investigate the cases with our law enforcement partners both on the federal, state, and local level .”
Mr. Schiff: Over 2,000 cases. Any estimate of the amount of money involved?
Mr. Weber: “Estimates on mortgage fraud in the United States go up into the billions of dollars lost through mortgage fraud .”
Mr. Schiff: Taking a look at a chart prepared by the FBI’s Financial Crimes Section in the Criminal Investigative Division, pending mortgage fraud cases have grown steadily. In 2003, there were more than 400 pending cases; in 2004 about a hundred more; then in 2005, the number was over 700; nearly 900 in 2006; over 1,200 in 20007; and the number of pending mortgage fraud cases the FBI was working in 2008 was more than 1,600. We asked Special Agent Weber what tips the FBI can offer to citizens so they do not become victims of mortgage fraud.
Mr. Weber: “The first tip, and probably the most important tip we give is ‘if it sounds too good to be true it probably is.’ Some of the other tips we give is ‘you should always get referrals from friends or relatives with respect to real estate professionals.’ We ask that people look at written information and investigate as much as they can on their own the actual value of the property they’re purchasing. We also notify people to be extremely wary of strangers or unsolicited offers for help; people who come to you to offer you assistance . We also ask people to know and understand the terms of the mortgage and the documents they sign.”
Mr. Schiff: We asked Weber if it’s a good idea for everyone to check as much as you can about the company and individuals you are dealing with to avoid being a victim of a scam.
Mr. Weber: “Absolutely. I think it starts with obtaining a decent real estate professional to deal with. And that is why we do recommend that people get referrals from friends and relatives for those people. We also recommend that if, at ay point, people don’t understand the process, or at any point people don’t understand what they’re signing, that they not sign those documents and that they obtain the assistance they need so that they’re comfortable in the understanding of what they’re signing .”
Mr. Schiff: Weber says the FBI and the Department of Justice have been very busy taking mortgage fraud through the courts.
Mr. Weber: “As I said, the FBI is currently investigating over 2,100 mortgage fraud cases. In 2008, during the fiscal year of 2008, the FBI, working with our state, federal, and local partners, obtained 560 indictments and informations against mortgage fraud perpetrators. We also obtained 330 convictions of individuals perpetrating mortgage fraud schemes.”
Mr. Schiff: Protect yourself. If something doesn’t sound right, doesn’t look right, it might not be the right thing for you to do. Do some checking. If you think you may be or have been a victim of mortgage fraud, contact your nearest FBI office. Much more about this on the Internet at www.fbi.gov. That concludes our show. Thanks for listening. I’m Neal Schiff of the FBI’s Office of Public Affairs.
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