U.S. Report Links Mortgage Fraud, Other Financial Crimes

March 17, 2009

Suspects reported for mortgage loan fraud are often involved in other financial crimes, such as check fraud, money laundering and stock manipulation, the Financial Crimes Enforcement Network (FinCEN) reported Monday.

FinCEN, a unit within the U.S. Treasury Department, said it identified about 156,000 mortgage fraud subjects and found that 2,360 of those suspects were reported for suspicious activity in other financial areas.

“Criminal actors may attempt to exploit any vulnerability to commit fraud and launder money through a range of financial institutions,” FinCEN Director James Freis said in a statement.

The report studied suspicious activity reports from July 2003 and June 2008 that were submitted by depository institutions, money services businesses, securities brokers and dealers, insurance companies, and casinos and card clubs.

It found mortgage loan fraud subjects’ other suspected financial crimes were most likely to be in money laundering and transactions apparently structured to avoid currency transaction reporting requirements.

FinCEN said it is further analyzing the relationship between mortgage loan fraud and other financial fraud.

Federal Deposit Insurance Corp Chairman Sheila Bair said earlier this month that the agency is pursuing more than 100 home mortgage fraud cases, and is investigating some 4,000 more.

She said cracking down on mortgage fraud “is a safety and soundness issue for both the banking industry and the housing markets.” (Reporting by Karey Wutkowski; Editing by Tim Dobbyn)


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