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Federal-state partnership launched to combat mortgage fraud


State and federal officials this morning announced the creation of a new joint working group aimed at investigating and prosecuting mortgage fraud in Iowa.

The working group, led by U.S. Attorney Nick Klinefeldt and Iowa Attorney General Tom Miller, will combine the investigative arms of several federal and state agencies, the officials said in a press conference. The group will identify and investigate targets for criminal prosecution in the Southern District of Iowa.

“Attorney General Miller has been a nationwide leader in using civil enforcement tools to combat mortgage fraud,” Klinefeldt said. “This relationship will allow federal prosecutors and investigators to obtain the experience of the attorney general, get leads on new cases, and refer cases back to the state in instances where federal criminal prosecution is not warranted but state civil or criminal enforcement efforts might be.”

The Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development’s Office of Inspector General will participate in the task force, along with the Iowa attorney general’s Consumer Protection Division and the Iowa Division of Banking. Other federal agencies that may be involved include the Secret Service, Internal Revenue Service, U.S. Postal Inspection Service and the Social Security Administration.
The FBI is currently investigating 21 pending cases of mortgage fraud in the state involving 50 subjects and an estimated $32 million in illegal gains. Nationally, the number of cases has increased from fewer than 500 in fiscal 2003 to more than 3,000 in the past fiscal year, and more than 69,000 reports of alleged mortgage fraud have been made within the past fiscal year.   

“Mortgage fraud is not a victimless crime,” said Weysan Dunn, special agent in charge with the FBI’s Omaha Division covering Nebraska and Iowa. “It effectively robs honest, hard-working citizens, because they eventually pick up the tab.”

Miller said he believes the working group will also serve as a deterrent to mortgage fraud in the state.

“The whole idea is to make Iowa a very bad place to do mortgage fraud,” he said.

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