Mortgage Fraud Task Force Stats

In what has to be one of the greatest indictments to date of the lack of meaningful integrity within Washington, news broke late last week regarding mortgage fraud investigation and enforcement statistics that totally blew me away.

Before we dive into the cesspool that defines this story, let’s set the proper backdrop.

One would think that a government initiative with the name Financial Fraud Enforcement Task Force would have been incredibly busy over the last few years. For those unaware, President Obama established this initiative in November 2009. It’s mission?

. . . to hold accountable those who helped bring about the last financial crisis as well as those who would attempt to take advantage of the efforts at economic recovery.

With more than 20 federal agencies, 94 US Attorneys Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.

One of the specific initiatives under this umbrella is the Residential Mortgage-Backed Securities Working Group launched in late 2011,

. . . co-chaired by Assistant Attorney General for the Criminal Division Lanny Breuer, Principal Deputy Assistant Attorney General for the Civil Division Stuart Delery, U.S. Securities and Exchange Commission Acting Director of Enforcement George Canellos, United States Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman. The coordinator of this working group is Matthew Stegman.

Did you just start to get a queasy feeling seeing Breuer’s name as head of this group? We remember him as the faker within the DOJ who ran interference for Wall Street over the last few years. So how did Lanny and the boys do on this front investigating mortgage fraud? Are you sitting down?

Bloomberg reported the following incredible news late Friday afternoon,

President Barack Obama’s administration significantly overstated statistics from a year-long mortgage-fraud initiative, including total number of victims, their losses suffered and number of individuals criminally charged, according to an FBI memo.

The Federal Bureau of Investigation, in the document sent today, asked members of the administration’s Mortgage Fraud Working Group to correct and update any public materials related to the results released in October of a year-long law enforcement initiative targeting fraud schemes aimed at vulnerable homeowners.

The FBI restated the number of people criminally charged to 107 from 530. Agencies were asked to correct victims’ total losses to $95 million from an estimated $1 billion, and the number of victims found to 17,185 from more than 73,000.

Lies, blatant misrepresentations, and a lack of meaningful integrity are all part and parcel of the pervasive crony capitalism that runs between Washington and Wall Street but they certainly are not the principles upon which a country tries to recover from the greatest crisis in 70 years.

“This targeted approach resulted in the successful filing of many criminal and civil cases around the country, but regrettably, the statistics reported in October included cases that fell outside the specific parameters of the initiative,” the FBI, which co-chairs the mortgage group, said in the memo.

The corrected statistics come in response to a Bloomberg News story reporting that some cases cited occurred before the initiative began in October 2011, including one filed by prosecutors more than two years before Obama took office.

The Justice Department, after questions were raised about the initiative, conducted an “extensive review” and found that the list included criminal defendants charged before the initiative and in circumstances outside the stated definition of “distressed homeowner” cases, the memo said.

Christopher Allen, an FBI spokesman, declined to comment beyond the memo.

The information used to compile the results came from an FBI survey of the agencies in the Financial Fraud Enforcement Task Force’s Mortgage Fraud Working Group.

“Please be sure to update any online materials posted by your agencies to reflect these changes,” the FBI told the other agencies in the memo.

Would seem that perhaps the greatest fraud being perpetrated here is the one played on the American public by the task force itself.

But I guess what are we to expect when all too much evidence indicates that both Washington and our regulators are In Bed with Wall Street.

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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