Suspects may find themselves behind bars living rent free thanks to nationwide mortgage fraud arrests.

Members of the Financial Fraud Enforcement Task Force released the results of a nationwide dragnet, “Operation Stolen Dreams,” which targeted mortgage fraudsters throughout the country and is the largest collective enforcement effort ever brought to bear in confronting mortgage fraud. The White Collar Crime Committee of the National Association of Chiefs of Police obtained relevant documents describing this enormous operation.

The sweep was organized by President Barack Obama’s interagency Financial Fraud Enforcement Task Force, which was established “to lead an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.”

Starting on March 1 through June 17, Operation Stolen Dreams has involved 1,215 criminal defendants nationwide, including 485 arrests, who are allegedly responsible for more than $2.3 billion in losses. Additionally, to date the operation has resulted in 191 civil enforcement actions, which have resulted in the recovery of more than $147 million, according to the Federal Bureau of Investigation.

“From home buyers to lenders, mortgage fraud has had a resounding impact on the nation’s economy,” said FBI Director Robert S. Mueller, III. “Those who prey on the housing market should know that hundreds of FBI agents on task forces and their law enforcement partners are tracking down your schemes and you will be brought to justice.”

Unlike previous mortgage fraud sweeps, Operation Stolen Dreams focused not only on federal criminal cases, but also on civil enforcement, recovering money for victims and increasing cooperation with state and local partners.

The operation was conducted in conjunction with the Department of Justice — including the FBI, U.S. Attorneys Offices, the U.S. Trustee Program, and other components — as well as the Department of Housing and Urban Development, the Department of the Treasury, the Federal Trade Commission, the Internal Revenue Service, the U.S. Postal Inspection Service, the U.S. Secret Service, the National Association of Attorneys General, and the National District Attorneys Association.

The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources, according to officials.

MORTGAGE FRAUD REPORT

According to the Federal Bureau of Investigation’s 2009 Mortgage Fraud Report, released today, mortgage fraud suspicious activity reports referred to law enforcement increased 5 percent to 67,190 during fiscal year 2009.

It’s estimated that $14 billion in fraudulent loans originated in 2009. The total dollar loss attributed to mortgage fraud is unknown.

Other key findings presented in the report include:

There are more than 2.8 million properties with foreclosure filings, a 120 percent increase from 2007 to 2009. The Las Vegas area reported the most significant rate of foreclosures, with more than 12 percent of housing units there receiving a foreclosure notice.

The top 10 states ranked by the number of foreclosure filings per housing unit were California, Florida, Arizona, Michigan, Nevada, Georgia, Ohio, Texas, and New Jersey. In April 2010, one in every 386 housing units received a foreclosure filing.

Prevalent mortgage fraud schemes in fiscal year 2009 include loan origination, foreclosure rescue, builder bailout, equity skimming, short sale, illegal property flipping, reverse mortgage fraud and loan modifications. Emerging trends include fraud involving economic stimulus plans/programs, property theft/fraudulent leasing of foreclosed properties and tax-related fraud.

Back in December of 2005 and again in January of 2006, I mailed a letter to each state’s Attorney General requesting that they looking to the dangers associated with companies that generate fake pay stubs for ‘novelty’ purposes. Back then, now defunct sites like the one calling itself Novelty Paycheck Stubs, advertised that for just $90, anyone could order “novelty” paycheck stubs that could be used to “fool anyone” with falsified salary information. The companies that produced the stubs would even include your social security number and home address just to make them look official. Sadly, many of the fake stubs were used by Real Estate industry insiders, con artists, straw buyers, and fraudsters to induce leading financial institutions into make home loans that otherwise would not have been made.

Call them what you want, fake pay stubs, fake payroll stubs, fake check stubs, sample paycheck stubs, or even novelty paychecks… I think these things are bad, bad news, plain and simple!

What do you think? Do sites like this one I just found–FAKEPAYCHECKSTUBS.COM–really serving the greater good or are they nothing more than wolves in sheep’s clothing? You already know I feel. Click on the “Comments” link below to share your own thoughts.

2006-01-23 19:45
As a direct result of a letter I recently sent to Oregon’s Attorney General, Oregon’s Division of Finance and Corporate Securities has issued a consumer warning about businesses that offer novelty paycheck stubs. Oregon is doing what every state in the country should be doing right now… cautioning everyone who goes online about releasing personal information, especially social security numbers, to any person or business that claims to be able generate authentic looking pay stubs.

From Oregon’s recently posted consumer alert:

The Oregon Division of Finance and Corporate Securities warns consumers and businesses about entities that purport to offer novelty paycheck stubs. One website, which may no longer be active, called Novelypaycheckstubs.com, claimed to offer authentic looking payroll check stubs as a “novelty” or entertainment item. The Division is concerned that these products can easily be used to falsify employment or payroll information for qualifying for a home mortgage loan or extension of credit for other purposes.

Oregon’s swift action to my letter is appreciated, and should serve as an example to every other state’s Attorney General.

The Associated Press (AP) is reporting this morning that New Jersey-based Automatic Data Processing Inc. (ADP) has filed a trademark infringement lawsuit in federal court in San Jose, Calif., against Novelty Paycheck Stubs dot com and the operators of the site that produces the phony pay stubs.

While today’s article is simply a repeat of yesterday’s St. Petersburg Times story (which I blogged about yesterday), the fact that it’s now an AP Wire story, coupled along with the headline (”ADP sues Web site over fake pay stubs“) should bring nationwide exposure to story.

So far, the AP story is running in the following papers:

- Pennsylvania: The Philadelphia Inquirer
- New York: New York Newsday
- Texas: Fort Worth Star Telegram
- New Jersey: The Record and Herald News
- Florida: Orlando Sentinel
- Massachusetts: Worcester Telegram & Gazette
- More from Florida: The Gainesville Sun

Feel free to leave me a comment below if you too see this story elsewhere, or if you yourself have spotted another company claiming to print phony pay stubs.

In an excellently written article in today’s St. Petersburg Times, staff writer Jeff Testerman calls our attention to a Tampa, Florida-based Internet company that promises to provide “phony but authentic-looking pay stubs” to anyone who’s willing to pay. From today’s St. Petersburg Times:

On its Web site, the company says you might need its product if you’re depressed about your lousy income and want to “look like you make big bucks.” It also suggests buying a fake pay stub if “your spouse thinks you’ve been at work and you need proof.” But a real estate industry watchdog and a federal lawsuit against the company call it an invitation to lending fraud.

The outfit Testerman refers to in the article is but one of many shocking examples of companies that are making considerable sums of money by aiding in practices that are criminally deceptive. Oftentimes, their offices bounce from state to state in an effort to find a state with a degree of ignorance or tolerance for their shady activities.

Click here for the entire article, which includes a few quotes from your’s truly. And remember, since committing fraud is no accident, preventing it shouldn’t be one either!