by Dan Krell © 2010
Last week, the United States Attorney for the District of Maryland, Rod J. Rosenstein announced recent results from local efforts of Operation Stolen Dreams. Coordinated through the Financial Fraud Enforcement Task Force, Operation Stolen Dreams has been described by the Department of Justice as the “largest collective enforcement effort ever brought to bear in confronting mortgage fraud.”
For those who don’t remember, the Financial Fraud Enforcement Task Force (StopFraud.gov) was established in November 2009 by President Obama as an interagency effort to “hold accountable” those who contributed to the recent financial crisis and to prevent a future crisis. Comprised of 20 federal agencies and 94 United States Attorneys’ Offices, as well as state and local authorities, the Task Force is the broadest coalition ever established to combat financial fraud.
The June 17th U.S. Attorney press release was not a final declaration but rather an interim report to make the public aware of the success of recent cases pursuing and prosecuting those who engaged in financial fraud, which includes mortgage fraud, mortgage modification scams, and other activities. Not only has Operation Stolen Dreams succeed in criminally prosecuting 1,215 defendants nationwide, civil enforcement efforts have recovered more than $147 Million.
Recent fruits of the operation include the superseding indictment of a Bethesda man and the conviction of a College Park/Laurel duo. On June 16th, a superseding indictment was issued against a Bethesda man who allegedly used his position as a mortgage originator for a Laurel mortgage company to allegedly participate in a mortgage fraud scheme that defrauded lenders (and others) of over $7.4 Million. The seventeen count superseding indictment chronicled the alleged mortgage fraud activities from 2005 to 2007.
On Jun 10th, a College Park/Laurel duo, were convicted of multiple counts of wire fraud. Testimony recounted how the two, who were employed in the mortgage industry, used straw buyers and stolen identities to purchase properties which almost immediately went into foreclosure- resulting in a loss of $664,493 for a local lender.
In addition to assisting the Financial Fraud Enforcement Task Force in Federal cases, the Maryland Mortgage Fraud Task Force also investigates State and local financial crimes. Among the many cases that have been investigated, some have resulted in the closing of mortgage modification and loss mitigation businesses that allegedly defrauded home owners seeking financial relief.
Recently, a case investigated by the Maryland Mortgage Fraud Task Force resulted in an indictment that was issued against a Montgomery County real estate agent for allegedly defrauding the County. It is alleged that the real estate agent used straw buyers to purchase moderately priced dwelling units (MPDUs are homes that are made available to homebuyers who meet specific requirements to purchase through Montgomery County). Additional allegations include mortgage fraud as well as allegedly violating the MPDU program guidelines by renting out these homes.
U.S. Attorney Rod J. Rosenstein was succinct when he stated, “…Our goals are to punish con artists who have committed mortgage fraud and deter others from following in their footsteps.” Mortgage fraud is being pursued as never before. It is without a doubt that federal and local investigations are making an impact on fraudsters and scammers. To assist consumers to protect themselves from fraud, the Financial Fraud Enforcement Task Force website, StopFraud.gov, has many resources; including how to report suspected mortgage fraud.
This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of June 21, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell.