Obama Administration Accused of Lying about Mortgage Fraud Crackdown Data
When U.S. Attorney General Eric Holder announced at an October 9 press conference that a year-long crackdown on mortgage fraud had resulted in “285 federal criminal indictments and informations against 530 defendants for allegedly victimizing more than 73,000 American homeowners—and inflicting losses in excess of $1 billion” he padded the numbers by including cases initiated before the initiative began. At least one case dated back to the George W. Bush administration. His quote has since been removed from the Justice Department web site.
The Obama administration’s “Distressed Homeowner Initiative” ran from October 1, 2011, to September 30, 2012, and was led by the FBI after agents took notice of a spike in fraud directed against homeowners who were at risk of foreclosure. The unavailability of a complete list of the cases makes it impossible to determine how many of them predated the initiative.
According to FBI spokesman William Carter, the FBI included cases filed before the start of the initiative because some sort of “law enforcement action” occurred during the year-long project, insisting that “There is no attempt to fudge the numbers or make it look like it was a bigger problem than it was.”
Of the eight cases DOJ called recent, two were filed before Oct. 1, 2011, including the case of Chicago attorney Norton Helton, who was sentenced on January 18, 2012, to 15 years in prison for his involvement in 102 fraudulent mortgage bailout transactions. The case against Helton was filed in October 2006.
A case filed in New Jersey in July 2009 against the owners of a mortgage brokerage, an attorney and legal staffer, included four guilty pleas this year and a March conviction of another defendant. Charges against another defendant were dismissed two years ago.
Holder also denied that the timing of the announcement, just three weeks before the presidential election, was unrelated to politics. “The notion that this is a campaign event—I mean, there’s a logical break,” said Holder. “This thing started with the fiscal year last year and ends with the fiscal year September 30. So we’re now reporting on what happened over the past fiscal year. That’s what this is all about.”
To Learn More:
U.S. Mortgage Fraud Initiative Included Bush-Era Case (by Phil Mattingly and Tom Schoenberg, Business Week)
Feds charged 530 in Crackdown on Mortgage Scams this Year, Holder Says (by Brady Dennis, Washington Post)
The Obama Mortgage Settlement is Just Another Bank Bailout in Disguise (by David Wallechinsky, AllGov)
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