What is Operation Malicious?
As per thepress release by FBI on June 9th 2008
WASHINGTON – TheDepartment of Justice and Federal Bureau of Investigation (FBI) announced todaya national takedown of mortgage fraud schemes, the culmination of substantialcoordinated efforts during the last three and a half months to identify arrestand prosecute mortgage fraud violators through the United States. OperationMalicious Mortgage highlights the strong enforcement response undertaken by theDepartment of Justice and its law enforcement partners to combat the threatmortgage fraud poses to the U.S. housing industry and worldwide credit markets.
“Operation Malicious Mortgage is aconcerted, joint law enforcement and prosecutorial effort aimed at disruptingindividuals and groups engaged in mortgage fraud,” said FBI Director Robert S.Mueller, III. “This operation is an example of our unified commitment toaddress this significant crime problem. The FBI will continue to directinvestigative and analytic resources towards mortgage fraud and corporatesecurities fraud that threaten our nation’s economy.”
Operation Malicious Mortgagerepresents the joint collaborative efforts of the FBI, U.S. Postal InspectionService, Internal Revenue Service-Criminal Investigation Division, U.S.Immigration and Customs Enforcement, U.S. Secret Service, U.S. Trustee Program,Department of Housing and Urban Development Office of the Inspector General,Department of Veterans Affairs Office of the Inspector General, and FederalDeposit Insurance Corporation Office of the Inspector General. OperationMalicious Mortgage is the most recent coordinated sweep in an ongoing lawenforcement effort to combat mortgage fraud, which also included OperationContinued Action in 2004 and Operation Quick Flip in 2005.
Mortgage fraudsemploy a variety of tactics including misrepresentations, deceit and othercriminal abuses to fund, purchase or insure mortgage loans. OperationMalicious Mortgage addresses primarily three types of mortgage fraudschemes: lending fraud, foreclosure rescue scams and mortgage-relatedbankruptcy schemes. Lending fraud frequently involves multiple loantransactions in which industry professionals construct mortgage transactionsbased on gross fraudulent misrepresentations about the borrower’s financialstatus, such as overstating the borrower’s income or assets, using false orfictitious employment records or inflating property values. Foreclosurerescue scams involve criminals who target legitimate homeowners in direfinancial circumstances and fraudulently collect fees for foreclosureprevention services or obtain ownership interests in residentialproperties. Both of these fraudulent mortgage schemes may be furthered byfiling bankruptcy petitions that automatically stay foreclosure.
The President’s Corporate Fraud TaskForce, chaired by Deputy Attorney General Filip, is also responding to issuesraised by mortgage fraud in the corporate sector. Created in 2002 toinvestigate and prosecute significant financial crimes, the Task Force includesrepresentatives from ten federal departments, commissions and agencies, inaddition to seven U.S. Attorney’s Offices and two Divisions within theDepartment of Justice, combining the experience of thousands of investigators,attorneys, accountants and regulatory experts. Since July 2002, the Departmentof Justice has obtained nearly 1,300 corporate fraud convictions, including theconvictions of more than 200 chief executive officers and corporate presidents,more than 120 cor
