Maryland mortgage - News

FBI’s anti-fraud efforts get no boost from stimulus package - Kansas City Star

14.02.09

To many Republicans, the $75 million tucked into the economic stimulus bill to hire new FBI agents was wasteful or inappropriate, right up there with new icebreakers and stop-smoking programs.</p><p>But to many, the desolation left from the financial debacle would appear especially fertile ground to grow new jobs, at least in the crime-busting field.</p><p>The FBI has 530 active corporate-fraud investigations running &#8212; 38 involving some of the biggest names in corporate finance related to the current meltdown, FBI Deputy Director John Pistole told the Senate Judiciary Committee this week.</p><p>That doesn&#8217;t count the 1,800 mortgage-fraud cases, he said, twice that of just two years ago.</p><p>On Wednesday, it was learned that Ruth Madoff, the wife of the accused Wall Street Ponzi king, had pulled $15 million out of a brokerage firm owned by her husband only days before he was arrested.</p><p>And at least six new suspected multimillion-dollar fraud cases &#8212; some smaller Ponzi schemes, but reaching up to $1 billion lost &#8212; popped up last month from Florida to Idaho.</p><p>The agency could use some help, reasoned Sen. Barbara Mikulski, chairwoman of the appropriations subcommittee overseeing the FBI&#8217;s budget, so she inserted the $75 million into the stimulus bill. The Maryland Democrat wanted to fund at least 165 new agents hired and trained to tackle the mortgage mess.</p><p>Republicans argued the item belonged in a regular spending bill, but Democrats noted that would mean many months more waiting for passage of appropriations bills.</p><p>When the 1,071-page version came out of the conference committee, the FBI reinforcements had been wiped out.</p><p>Concerns of understaffing and a drop in criminal prosecutions nationwide have been heard since the Bush administration shifted at least 2,000 FBI agents from regular crime squads to counterterrorism after the Sept. 11 attacks.</p><p>Pistole said the bureau is &#8220;doing a complete scrub of all resources&#8221; to ensure that enough agents are assigned to the corporate cases, which may involve name brands such as American International Group, Countrywide Financial, Fannie Mae and Freddie Mac.</p><p>Bridget Patton, spokeswoman for the FBI&#8217;s Kansas City office, said this area had ranked fairly high in mortgage-fraud cases until last year. &#8220;We&#8217;ve been working mortgage fraud before it became the big hot topic.&#8221;</p><p>The paper wave was shown by the 560 mortgage-fraud indictments and informations nationwide in 2008, she said, compared with 328 the year before. Convictions rose from 283 to 338. Patton suggested that the skewed proportion was the results of Operation Malicious Mortgage last spring involving 46 of 56 FBI field offices, &#8220;which is huge.&#8221;</p><p>Authorities think hundreds of millions of dollars have been siphoned from the mortgage system and even organized crime has found the tap. The problem is so vast, Pistole testified this week, that the bureau is not focusing on individuals, but the larger schemes involving &#8220;lawyers, brokers or real estate professionals that are systematically trying to defraud the system.&#8221;</p><p>Neil Barofsky, inspector general for the $700 billion Wall Street bailout, supported the pursuit of licensed professionals: &#8220;They have the most to lose, they&#8217;re the most likely to flip, and they make the best examples.&#8221;</p><p>Vice President Joe Biden and Senate Judiciary Committee Chairman Patrick Leahy are among those arguing to beef up the FBI&#8217;s anti-fraud efforts.

Source: Kansas City Star, MO