FBI Director Robert S. Mueller, III,
for the Operation Malicious Mortgage
Press Conference, June 19, 2008
I want to underscore the Deputy Attorney General’s
remarks on the significant threat posed by both mortgage fraud
and corporate securities fraud.
Operation Malicious Mortgage focused
on three types of mortgage fraud – lending fraud, foreclosure
rescue schemes, and mortgage-related bankruptcy schemes. Through
this operation, more than 400 defendants
have been charged. We have obtained 173 convictions and 81 sentencings
in crimes that accounted for more than $1 billion dollars in
estimated losses.
These results represent takedown operations
in 46 of our 56 field offices. As part of this operation, the
FBI has also secured
nearly 60 million dollars in assets.
The FBI is working closely
with our partners to identify emerging mortgage fraud schemes
on both the individual and corporate level.
We will continue to
direct additional resources to combat this growing problem.
The
FBI has seen steady growth in pending FBI mortgage fraud cases.
The Bureau has engaged each of our 56 field offices to focus
on this criminal priority. We currently have 42 mortgage fraud
task forces and working groups addressing this issue.
The FBI’s
mortgage fraud caseload has doubled in the past three years,
to more than 1,400 pending investigations.
In 2007, the FBI
obtained 321 indictments and informations, and 260 convictions
in mortgage fraud-related investigations. As
of April of this year, we had obtained 189 indictments and
informations and 122 convictions.
In Fiscal Year 2007, we had 120
Agents working mortgage fraud cases. Today, there are 180 Agents
working such cases, including
19 sub-prime-related corporate fraud investigations. The majority
of the corporate fraud investigations deal with Accounting Fraud,
Insider Trading, and with criminal intent,
the failure to
disclose the proper valuations of the securitized loans and
derivatives.
In many of these investigations, the Bureau is working
with the Securities and Exchange Commission and DOJ to determine
the criminal
intent of these identified violations. As you all know, in cases
such as Enron and WorldCom, these cases are document intensive
and complex.
We appreciate the efforts of the Eastern District
of New York, the SEC, and the New York Field Office resulting
in the swift
indictment of the Bear Stearns wrong-doers Mark mentioned.
The
FBI recognizes these Corporate Fraud cases will increase in numbers
due to an enhanced level of regulatory and internal audit
reviews by many of these Wall Street Firms, and we will address
these cases as they are identified.
Currently, the FBI has been
focusing its investigative resources on potential frauds committed
by Investment Banks, Hedge Funds,
Brokerage Houses, Rating Agencies, and Due Diligence Firms.
It is clear that emerging and re-emerging
schemes in a down market include builder-bailouts, seller assistance,
short
sales, foreclosure
rescue, and identity thefts exploiting home equity lines of
credit.
Several of these schemes have emerged with the potential
to spread as the recent rise in foreclosures, depressed housing
prices,
and decreased demand place financial pressure on lenders, builders
and home sellers.
We will continue to work hard with our federal,
state, and local partners to combat these frauds, and we will
continue to dedicate
the necessary resources to this challenge. Our objective, as
always, is to protect the consumer and stabilize our economic markets.
I would be happy to answer any questions.
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