Mortgage Fraud Task Force Bulks Up

WASHINGTON D.C. – The feds are throwing more weight at the mortgage mess. Deputy Attorney General Mark R. Filip announced today a significant expansion of the President’s Corporate Fraud Task Force, bringing in six new agencies to focus on the rampant fraud driving the ongoing housing crisis. This isn’t about helping homeowners; it’s about chasing the money and the executives who profited from the collapse.

Joining the existing crew are the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve, the Department of Housing and Urban Development, and the Special Inspector General for the Troubled Asset Relief Program (TARP). These agencies represent a clear signal that the investigation isn’t just looking at individual scams, but the systemic failures that fueled the bubble and subsequent bust. The feds are digging into complex securitization schemes – how bad mortgages were bundled and sold as safe investments – and who knew what when.

“The Task Force is uniquely suited to providing the kind of thoughtfulness and collaboration that can be invaluable in tackling mortgage fraud at the corporate level,” Filip stated, carefully avoiding the word “accountability.” Translation: they’re building a case to prove criminal intent, not just negligence. The addition of TARP’s oversight, in particular, suggests a focus on how bailout funds were potentially misused or diverted through fraudulent schemes.

The Task Force already boasts a heavy-hitting roster: Assistant Attorneys General from the Civil and Tax Divisions, the FBI Director, seven U.S. Attorneys Offices, and the heads of Treasury, Labor, the SEC, CFTC, FERC, FCC, and the Postal Inspection Service. This isn’t a small operation. Since its creation in July 2002, the Task Force claims to have secured nearly 1,300 corporate fraud convictions, including over 200 CEOs and presidents, 120 VPs, and 50 CFOs. Those numbers, however, barely scratch the surface of the damage done.

Created in the wake of Enron and WorldCom, the Task Force initially targeted broad corporate misconduct. Now, the focus is laser-sharp on the financial instruments that brought the economy to its knees. Prosecutors are reportedly building cases involving accounting fraud, securities fraud, insider trading, market manipulation, and a host of other financial crimes. They’re not just going after low-level players; they’re aiming for the architects of the disaster.

While the feds tout their successes, the public remains skeptical. Years after the crisis, few top executives have faced meaningful jail time. This expansion of the Task Force is a move to demonstrate renewed commitment, but the real test will be whether it translates into convictions that reach the highest levels of the financial industry. Those following the case can find more information at http://www.usdoj.gov/dag/cftf/, though don’t expect full transparency from this operation.

RELATED: Big Swing Against Mortgage Fraud: Task Force Swells

RELATED: Bay Area Real Estate Pros Accused of $55M Mortgage Scam