Dragnet Reels in Hundreds of Suspected Fraudsters
A wide sweeping dragnet focused on mortgage fraud has reeled in hundreds of suspects across the country. Headlining this show of force were two former hedge fund managers at Bear Stearns, the fabled New York investment company that nearly went bankrupt a few months ago. Something like this had to happen. Too many companies and households are going broke for someone not to go to jail. Somehow, I think many of the wrong people are being blamed. Why isn’t Angelo Mozilo being frog-marched like Ralph Cioffi and Matthew Tannin the hedge fund managers from Bear? Why isn’t Chris Dodd being impeached for trying to pass legislation disguised as a homeowner bailout when the laws are really a bailout for his friends at Countrywide?
I’ve said for some time the fraud in real estate over the past
few years contributed greatly to the mortgage collapse. Today’s bust helps solidify that theory, but there are many more people out there that didn’t get picked up.
Hundreds of people across the country have been arrested by law enforcement officials targeting crooked mortgage brokers, real estate agents, and other industry officials, the head of the FBI and a top Justice Department official said Thursday.
More than 400 people have been charged in the mortgage fraud probe, of whom nearly 300 have been arrested, including 60 in a coordinated sweep Wednesday, the Justice Department said.
The losses in the mortgage fraud cases cost consumers more than $1 billion, Mueller said.
Two Utahns can count themselves among that number.
Jerry C. Huff, of Hurricane, and Bryan D. Conrad, of Salt Lake City, are charged in separate, unrelated indictments returned by a federal grand jury last week.
Huff faces charges of wire fraud, money laundering and failure to file a federal tax return. Prosecutors claim he made a number of false representations to get a $250,000 second mortgage on his home in Moab.
Conrad is charged with bank fraud and aggravated identity theft. He’s accused of using false identities to help obtain a mortgage loan.
Meanwhile, Casey Serin who defrauded banks to the tune of $600,000 remains in the comfort of his parent’s house in Sacramento working when he wants to and living off a lucky gamble on a penny stock financed through questionably obtained corporate credit.
I think this is all a big show. Those arrested are out of jail, out on bail and that’s the way it goes. The Riverbottoms scammers have yet to go to a trial scheduled for March and are still scamming. Despite the damage caused by the two Utahns indicted, prosecution will cost more than the losses, if any, that were incurred. The smoke and mirrors presented today keep us from looking at the bigger culprits in this whole mortgage mess.
It will take a long time to clean up. Making a big deal about arresting small time real estate scammers should be a little deterrent for would be fraudsters. A lengthy sentence handed out to Val Southwick last week should make some wanna bees think twice. National regulation of real estate professionals is inevitable. Despite Utah’s attempt to regulate title insurance, appraisers, real estate agents and mortgage brokers, high levels of fraud still take place, mostly at the hands of rogue professionals.
I hope today’s arrest spree has a positive effect, but I fear it’s all show and little substance. The fact guys like Brad Kitchen and Ron Clarke are still out there working unencumbered tells me something different. The recent revelations that our top law makers are beholden to mortgage companies is even scarier.