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U.S. Department of Justice

April 23, 2010

Financial Fraud Enforcement Task Force Hosts Mortgage Fraud Summit in Detroit

WASHINGTON – Representatives of the Financial Fraud Enforcement Task Force met in Detroit today for the third 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 greater Detroit metropolitan area is ranked 10th 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 study by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).  And according to FinCEN data, Michigan ranked eighth in the nation for mortgage fraud SARs.  According to True Standings Loan Performance, Detroit also ranked 9th in metropolitan areas for serious delinquencies in conventional mortgages.

Today, the task force members met with Detroit 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 panels, attendees discussed 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.

“Integrity in the mortgage lending business is crucial to protecting home owners, neighborhoods, and lending institutions,” said U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade.  “Mortgage fraud leads to foreclosures and vacant homes, which harm property values and create havens for criminal activity.  Today’s summit shows the commitment of the Department of Justice, along with our local law enforcement agencies and regulatory agencies, to combat the problem of mortgage fraud.”

“The president created the Financial Fraud Enforcement Task Force to hold perpetrators of fraud accountable to the fullest extent of the law and to help families protect what they have worked so hard to build,” said Assistant Attorney General for the Civil Division Tony West.  “In collaboration with our federal and state partners, we will prosecute those responsible for the corporate fraud that helped lead to our current financial crisis and bring to justice those who seek to use this crisis to take advantage of honest Americans for personal gain.” 

“Mortgage fraud and white collar crimes strike at the economic heart of the American system,” said U.S. Department of Housing and Urban Development (HUD) Inspector General Kenneth Donohue.  “To the extent that we can uncover and prosecute these activities, it’s to everyone’s benefit.  Accordingly, I am happy to lend the HUD Office of Inspector General’s nationwide expertise to this exceptional group of law enforcement agencies.”

“Mortgage fraud hurts borrowers, financial institutions, and legitimate homeowners,” said FBI Special Agent in Charge Andrew G. Arena.  “Working together with our federal, state and local partners on mortgage fraud task forces and working groups across the country, the FBI is committed to combating mortgage fraud to protect the American homeowner and the economy.”

Also participating in the summit were U.S. Attorney for the Eastern District of California Benjamin Wagner; Executive Director of the Financial Fraud Enforcement Task Force Robb Adkins; FinCEN Director James H. Freis Jr. and Division Chief David Tanay of the Criminal Division at the Michigan Attorney General’s Office.  The Detroit summit is the third of a series of mortgage fraud summits.  The task force held its first Mortgage Fraud Summit in Miami on February 14 and the second in Phoenix on March 25.

The Financial Fraud Enforcement Task Force is reaching out to communities through events like today’s, and through efforts like StopFraud.gov, the task force’s one-stop shop for the American people to learn how to protect themselves from fraud and to report it wherever - and however - it occurs.

The task force also partnered with Fannie Mae, Freddie Mac, the Lawyer’s Committee and NeighborWorks America to launch a consumer-friendly website, www.PreventLoanScams.org, which supports national, state and local law enforcement efforts.  The website, launched today, provides an accessible complaint form that can be filled out online and then entered into a nation-wide database and serves as a nationwide clearinghouse and destination for loan modification scam information on complaints filed, laws and regulations, and enforcement actions.

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.

To learn more about the task force, visit StopFraud.gov.

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