FBI arrests Real Estate Brokers in Mortgage Fraud case

The FBI has reportedly arrested 400 real estate brokers since March and dozens over the past 2 days as a part of its initiative to curb mortgage fraud, the primary reason behind the housing crisis. This was stated by the FBI officials at news conference held in Washington this Thursday (19th June, 2008).

The FBI operation named as Operation Malicious Mortgage have resulted in 406 defendants being charged in 144 mortgage fraud cases. On Wednesday, 60 arrests have been made in mortgage fraud cases in around 15 districts. And, charges were issued in more than 50 judicial districts by US Attorney offices. The primary objective behind the Operation Malicious Mortgage has been to crackdown incidents of loan fraud which is considered a threat to the economy and financial markets.

Besides arresting hundreds of brokers, the FBI has also issued charges against 2 former Managers at Bear Stearns in New York, who are the first executives to face criminal charges in relation to the subprime mortgage market crisis. Federal prosecutors have targeted Ralph Cioffi and Matthew Tannin who are suspected to mislead investors about the risky financial markets.

A group of people from Houston have also been accused of committing frauds with banks and stealing $24 Million in mortgage scam. Prosecutors suspect 6 defendants to have recruited people with good credit to pretend and act as buyers in fraudulent mortgage deals. Some of the defendants were mortgage loan officers and straw buyers under charges of conspiracy, fraud and money laundering.