Inspector General Slams the FBI and Department of Justice for Lying About Its Prosecution of Mortgage Fraud

Government Admits It Is Going Easy On Fraudsters

The Inspector General of the Department of Justice just issued a report slamming DOJ’s prosecution of mortgage fraud.

Initially, the report found that – despite talking a good game about going after mortgage fraud – the Department of Justice and its subsidiary, the FBI, placed a very low priority on mortgage fraud:

DOJ and its components have repeatedly stated publicly that mortgage fraud is a high priority and during this audit we found some examples of DOJ-led efforts that supported those claims. Two such examples are the Criminal Division’s leadership of its mortgage fraud working group and the FBI and USAOs’ participation on more than 90 local task forces and working groups. However, we also determined during this audit that DOJ did not uniformly ensure that mortgage fraud was prioritized at a level commensurate with its public statements. For example, the Federal Bureau of Investigation (FBI) Criminal Investigative Division ranked mortgage fraud as the lowest ranked criminal threat in its lowest crime category. Additionally, we found mortgage fraud to be a low priority, or not listed as a priority, for the FBI Field Offices we visited, including Baltimore, Los Angeles, Miami, and New York.

In addition, the Inspector General found that funds earmarked for mortgage fraud went to other activities:

We also found that while the FBI received $196 million in appropriated funding to investigate mortgage fraud activities from fiscal years 2009 through 2011, in FY 2011 the number of FBI agents investigating mortgage fraud as well as the number of pending investigations decreased.

The report slams the Department of Justice for wildly inflating the number of prosecutions and the amount of taxpayer losses involved:

During this press conference, the Attorney General announced that the initiative resulted in 530 criminal defendants being charged, including 172 executives, in 285 criminal indictments or informations filed in federal courts throughout the United States during the previous 12 months. The Attorney General also announced that 110 federal civil cases were filed against over 150 defendants for losses totaling at least $37 million, and involving more than 15,000 victims. According to statements made at the press conference, these cases involved more than 73,000 homeowner victims and total losses estimated at more than $1 billion.

Shortly after this press conference, we requested documentation that supported the statistics presented. In November 2012, in response to our request, DOJ officials informed us that shortly after the press conference concluded they became concerned with the accuracy of the statistics. Based on a review of the case list that was the basis for the figures, the then-Executive Director of the FFETF told us that numerous significant errors and inaccuracies existed with the information. For example, multiple cases were included in the reported statistics that were not distressed homeowner-related fraud. Also, a significant number of the included cases were brought prior to the FY 2012 timeframe.

Over the following months, we repeatedly asked the Department about its efforts to correct the statistics. We learned that, on August 9, 2013, the FBI provided a memorandum to the FFETF concluding that several of the statistics announced during the October 2012 press conference were substantially overstated. Specifically, the number of criminal defendants charged as part of the initiative was 107, not 530 as originally reported; and the total estimated losses associated with true Distressed Homeowners cases were $95 million, 91 percent less than the $1 billion reported at the October 2012 press conference. The Department’s October 9, 2012, press release and the press conference transcript of the Attorney General’s remarks, both available on the Department’s website, now include disclosures citing the inaccuracy of the originally reported statistics, and the language in each has revised wording and statistics based on the FBI’s August 2013 memorandum.

Despite being aware of the serious flaws in these statistics since at least November 2012, we found that the Department continued to cite them in mortgage fraud press releases that it issued in the ensuing 10 months. We believe the Department should not have continued to issue press releases with these statistics once it became aware of the serious flaws.

We also found that neither DOJ nor the FFETF had an established methodology for obtaining and verifying the criminal mortgage fraud statistics announced during the press conference on October 9, 2012. We found this process to be disturbing, and it led the Department to report inaccurate information to the public.

According to DOJ officials, the data collected and publicly announced for an earlier FFETF mortgage fraud initiative – Operation Stolen Dreams – also may have contained similar errors.According to these officials, a similar collection methodology was employed for the statistics publicly reported by the Department for this initiative.

Here’s the conclusion of the report:

The FBI did not rank mortgage fraud among its highest ranked priority white collar crimes. We further found that, despite receiving significant additional funding from Congress to pursue mortgage fraud cases, the FBI in adding new staff did not always use these new positions to exclusively investigate mortgage fraud. Moreover, when we attempted to assess the effectiveness of the Department’s efforts in pursuing mortgage fraud cases, we found that DOJ could not provide readily verifiable data related to its criminal and civil enforcement efforts. The DOJ’s release of significantly flawed information at a highly publicized press conference in October 2012 regarding the purported success of the FFETF’s and the DOJ’s recent mortgage fraud initiative reflects the lack of accurate data maintained by the Department regarding its mortgage fraud efforts, as well as the Department’s serious failure to adequately vet information that it was presenting to the public. Only days after the press conference the Department had serious concerns over the accuracy of the reported statistics, yet it was not until August 2013 when the Department informed the public that the October 2012 reported statistics were indeed flawed. Moreover, during those 10 months, the Department continued to issue press releases publicizing statistics it knew were seriously flawed. We believe the Department should have been more forthright at a much earlier date about this flawed information.

This is nothing new.

For example, the FBI warned of an “epidemic” of mortgage fraud in 2004. However, the FBI, DOJ and other government agencies then stood down and did nothing. See this and this.

And the Federal Reserve turned its cheek and allowed massive fraud. Indeed, Alan Greenspan took the position that fraud could never happen.

And – as we pointed out in 2010 – the Department of Justice “crackdown” on Wall Street is just a P.R. stunt targeting small-time crooks.

And see 30,000 Criminal Referrals Led to 1,000+ Felony Convictions In Major Fraud Cases During the S&L Crisis … Not Even a SINGLE Prosecution Today, Even Though the 2008 Crisis Was 70 Times Bigger.

This entry was posted in Business / Economics, Politics / World News. Bookmark the permalink.
  • This all you need to know is here. All verifiable facts in the words from the responsible parties that perpetrated and caused the event to facilitate!

    How The Democrats Caused The Financial Crisis: Starring Bill Clinton’s HUD Secretary Andrew Cuomo And Barack Obama; With Special Guest Appearances By Bill Clinton And Jimmy Carter

    • jadan

      Pity the poor bankers, forced against their will to issue fraudulent paper and earn huge fees and drive the world economy over a cliff! It’s all the government’s fault! That must be why the Fed bailed them out, to try to correct the damage done by government affirmative action policy! It’s the ni***rs and the damn gov’mint that created the problem!

  • Lyin Ryin More

    Ok, I will take a bitching out publically, if I can continue my criminal enterprise…seems a little easy but if that’s the status quo…

  • j w

    The FBI have been Lying DICKS on these matters for DECADES. The Reality of how CORRUPT They are is MIND BLOWING …..

  • j w

    Here’s the REAL Story of the Cover Up by FBI / DOJ and US Treasury Et al

  • rene

    The California 18, represented by Cj Holmes of Home Owners For Justice, sent in 18 cases of foreclosure mill fraud to KAMALA HARRIS in March 2013. a year later we are told they are NOT investigating. We told the deputy DA’s to quit wasting money on modification mills and realize that you cannot modify FRAUD! If it’s fraud it’s VOID! We have demanded a halt to ALL foreclosures in California and a FULL investigation into the DOCUMENTED felonious and criminal documents we have presented that are criminally recorded into the County Records and are STEALING OUR IDENTITIES, OUR LAND, HOME AND LIVES!! The Recorders offices are the CRIME SCENES of AMERICA! Kamala Harris we have asked you to provide your notarized oath and are told that there is not one to provide, all we get is an incomplete oath. We asked for your bond to file an insurance claim for the harm. By not criminally charging these crooks you are shielding the criminals from prosecution and concealing the crimes. This is also criminal. We believe that the right thing can be done, that you can abide by the laws and criminally charge RECONTRUST COMPANY, Bank of America, Bank of New York Mellon, Select Portfolio Servicing Inc, Quality Loan Servicing, Northwest Trustees, Pike Duncan, Ocwen, Wells Fargo, Chase, on and on and on..ALL ATTORNEYS who have filed the illegal documents and assisted in the crimes must be held criminally responsible to. Either you are FOR the PEOPLE or you are working WITH the crooks! We hope that you will decide to help the people! Go to The California 18 You Tube and WATCH. Go to Cj Holmes you tube Attorney General Presentation! STOP ALL FORECLOSURES! If it is securitized it should be quiet title and treble damages to ALL homeowners, not just those in foreclosure, but ALL!! TIME FOR OUR HOMEOWNERS TO BE VINDICATED AND YOU TO DO YOUR JOB!!

  • j w

    Here’s how F’d up the FBI and DOJ really are ……. [PDF] Audit of the Department of Justice’s Efforts to Address …
    … MORTGAGE FRAUD US Department of Justice Office of the Inspector General
    Audit Division Audit Report 14-12 March 2014 Page 2. … Text Version

    • Illusionati

      IT’S GONE!

  • Charlie Primero

    Thank you for reporting this WB.

  • JoAnn Kennedy
  • JoAnn Kennedy

    I am a widow, and last year on March 15, 2013 Art Jenkins, Corp. Mahady, Trooper Kelley and 2 other Troopers from the PA STATE Police Belfast barracks order me and my daughter home on break out of our home without any paperwork at gun point and threat of jail. fast forward this was colluded arrangement made by the wonderful neighbors the AYOUBS who had been stealing my mail while I was at work, and also Mike Ayoub would call Art Jenkins when Ieft my home and to go to work, then these two broke into my home. When I called the state police these morons would ask me if I had witnessed the alledge break in or witnessed the alledged mail theft so they were already in on this. It was pre-meditative fraud. The fraud, that the DA of Northamtpon County won’t investigate, the PA AG Kane won’t investigate the FBI won’t investigate the DOJ won’t investigate … my husband died in 1998 he had Met Life Insurance – Met Life sold his identity to Wells Fargo, Wells Fargo then submitted a fabricated decoy note with a fake address 4293 Hillendale road with my husband’s signature on it to Fannie Mae in 2005 — How did my husband sign this note in 2005 when he DIED IN 1998 yes, there is a fraud, it is colluded, it’s conspiracy and pre-meditated !! it gets better
    cause I can connect the collusion from the local LOwer Mount bethel township office all the way up thru the just recently fired sheriff and his attorney (what the hell would a sheriff need his own personal attorney for??) the Judges, the DA and the AG —

  • Terance Healy

    I was curious if you were aware of the Constitutional Challenge of Rule 1.6?

    Rule 1.6 made it illegal to prosecute injustice in the United States. A ‘law’ in every state enacted by the state Supreme Court results in an unconstitutional loss of rights and privleges of a litigant victim when an act of injustice occurs in a courtroom. (In Civil, Criminal or Family Courts)

    The ‘law’ makes it illegal for any prosecutor, district attorney or attorney general to prosecute – because it

    – would affect the integrity of the judiciary,

    – would reveal the prosecutorial misconduct of their own office, or

    – would expose individual liability.

    The victim is left with no recourse, or escape. They are bullied and harassed by the courts until one of three possible outcomes results. Loss of EVERYTHING in their life, prison, or suicide.

    There is nothing any judge can do to address the injustice. This is not judges protecting their own. It is a violation of Rule 1.6 if they even try. Their judicial integrity is sacrificed. This angers the judge who then seems to take it out further on the victim.

    When the act which caused the injustice is known and exposed (even in court) the damage to the victim worsens. The injustice grows each time the victim appears in court because no lawyer or judge may acknowledge to address the injustice or resolve the matter.

    The overall result is abuse of power under color of law. In criminal courts the prosecutor’s aggressive misconduct (all ‘lawful’, but unconstitutional – and they are not mandated to never it or they are quickly disciplined and discredited.), is ignored as it cannot be dealt with until the litigant has his constitutional rights restored. But they would have to figure out how they lost their rights – and there is NO ONE TO HELP. (They made helping the victim of injustice illegal.)

    The Constitutional Challenge of Rule 1.6 is in the Third Circuit Court of Appeals…. Plaintiffs have lawfully petitioned the court and served the challenge on every US Attorney General to address a constitutional calamity which has ‘LAWFULLY BUT UNCONSTITUTIONALLY’ persisted in the United State for decades.

    The states lost the ability to address the injustice of their own courts, and mandated that no lawyer, attorney general or district attorney invite the federal government to investigate.

    Each time the Federal Government has acted to address injustice and corruption of any state court, that state’s Supreme Court modified Rule 1.6 to close the loophole.

    Cash for Kids is one huge example in Pennsylvania. A massive example if the foreclosure crisis nationwide, where a fraud upon the court – a forged and false mortgage note or deed – resulted in the actual fraud being ‘lawfully’ ignored by the court while people everywhere lost their homes. It wasn’t necessarily the banks that caused the crisis. It was the lawyers who committed the initial fradu upon the court which could not be addressed. The victim of injustice lost their home because of a deliberate injustice and the mandate by Rule 1.6 that no on reveal it.

    They made it illegal for a lawyer to fix this crisis. It took two pro se defendants to find the needle in haystack of injustice… all delilberately and intentionally caused by the author of the ‘law’ … The American Bar Association.

    The same unconstitutional law, same number, same name, in every state. (Read more at )


    • rene

      not if they commit fraud..if there is fraud and it is not brought to justice immunity is off…

      • Terance Healy

        I know… so when Judge #16 gave up on law, procedure, due process and tried to attain my suicide… She blew the immunity for the 15 judges before her that she was trying to cover for.

      • Terance Healy

        ONLY in the CLEAR ABSENCE OF SUBJECT MATTER JURISDICTION is absolute judicial immunity lost.

  • Mabel Margaret

    How to save yourself from mortagge fraud? Good information offered about it.

    mortgage loan

  • agreetodisagreeandsoon

    I didn’t want to lose my property and neither did the rest of the homeowners. It was a scam! The DOJ was apart of it that’s why nobody was prosecuted. This country sucks along with all the ones who planned it all.

  • Tusense96761

    Just adds more proof of who is really running this country. When you have the largest criminal scam being played on the American people for 10 long years in these fraud foreclosures and the Attorney General of the U.S. does nothing. People in their 80’s being thrown to the streets after owning their homes for over 20 years , it is the Federal Reserve big Banksters greed running and destroying our country.