Attorneys Among 406 Indicted in Operation Malicious Mortgage
Developing: Details are beginning to emerge about 406 individuals reportedly indicted in an FBI crackdown on mortgage fraud that started March 1.
A total of 67 people charged in Chicago ranged from mortgage brokers to lawyers allegedly involved in fraudulent real estate schemes, according to an Associated Press account of an ongoing press conference in the Windy City.
In Seattle, a disbarred lawyer was among six individuals indicted there, reports the Seattle Times.
And the Atlanta Business Chronicle says seven suspects were charged in the Atlanta metropolitan area, all concerning the same straw-buyer mortgage scam centered around a single condominium development.
A total of 406 were arrested nationwide in Operation Malicious Mortgage, in 144 different cases involving an estimated $1 billion in fraudulent transactions, according to the article.
In the Detroit metropolitan area, 28 were charged, according to the Detroit News.
Nonetheless, these cases represent only a small fraction of the mortgage fraud problem, one expert says. “This is not even the tip of the iceberg that sank the Titanic. I believe that mortgage fraud has trashed the economy of the whole country,” Ralph Roberts, a suburban Detroit broker who has written books on the issue, tells the newspaper.
In the “Malicious Mortgage’ cases being brought, “The schemes include cheating lenders, swindling those facing foreclosure and filing fraudulent bankruptcy claims, officials said. Among those indicted were real-estate agents, lawyers, appraisers and borrowers,” writes Bloomberg in an account of a Washington, D.C., press conference by FBI Director Robert Mueller and Deputy Attorney General Mark Filip.
Although those currently facing charges generally are not involved in big cases, officials said they are investigating 19 companies, including hedge funds and investment banks, for possible accounting fraud and white-collar crime related to mortgage securities, Bloomberg notes
As discussed in an earlier ABAJournal.com post, the arrest today of two Bear Stearns managers marks the first time that executives have been charged in a criminal case related to the mortgage meltdown. The two are accused of misleading investors about the financial condition of a hedge fund that invested in subprime mortgages.
