I frequently mention the impact of fraud on the US economy and I’ve also pointed readers to the Federal Bureau of Investigation website. You can access a US map, click on your state, and read press releases from the different field offices. If the rest of the government were run as well as the FBI we probably wouldn’t be in the mess we’re in today. As it now stands, the government and lenders screwed the economy up and left it to the FBI to clean up their mess. Here are some stats that will blow your mind.
On mortgage fraud alone, estimated annual losses of $4 billion to $6 billion were incurred—I’m betting that’s a conservative figure because there is certainly more fraud out there as yet unannounced. There are a total of 42 FBI mortgage fraud task forces or working groups, with 1,644 investigations pending. In 2008, 734 mortgage fraud cases were opened, with 560 indictments/informations and 338 convictions. Remember, we're just talking 2008.
Top 5 states for mortgage fraud in 2008: Florida, Nevada, Michigan, California and Utah, in that order. New York came in at #9.
If you click around on the FBI website, you’ll be astounded at all the fraud perpetrated against the government and the lending industry. Here are a few samples—there are many more not listed here:
•Tampa, 2-19-09: $82.7 million mortgage fraud case.
•San Diego, 6-19-08: $5.1 million in potential losses from a mortgage fraud case.
•Deerfield Beach: 3-20-09: $5 million in fraudulent mortgage case.
•Miami, 12-23-08: $1 million in bank fraud case for real estate loans.
•Palm Beach, 12-4-08: $6.5 million mortgage fraud scheme.
•Manhattan, 3-23-09: $27 million mortgage fraud scheme
•New York, 3-19-09: $44 million in refinanced mortgage scheme/Fannie Mae.
•New York, 3-19-09: $800,000+ in mortgage fraud wherein the thieves targeted distressed homeowners by advertising help for foreclosures. What kind of jerk would do that?
Thieves don’t just target mortgage money. Medicare is basically raped by thieves every single year, to the tune of billions and billions. Investment fraud is also a preferred method for dishonest Madoff types. One organizer of a fraudulent enterprise in San Diego cheated investors—I don’t think major media even gave it a nod. The defendants claimed to raise money for helping the needy and financing medical research and development, pursuits that naturally made investors feel good about the deal. Those defendants owe 50 victims $40,556,065 in restitution. You can read about these types of fraud and more at the FBI field office sites.
Now think about all this. Is this a national security issue, considering the economic meltdown?
Whatever the case, it’s obvious that easy money and easy credit painted a large target on the US taxpayers’ backs. And now we get to bail out industries that in my opinion were part of the problem.
What, exactly, have all those Congressional financial committees, cabinet members, chairmen and employees responsible for federal oversight been doing?
At the moment, Congress is proposing record increases in spending. What they should be doing is freezing all federal spending, and furthermore, cutting non-vital budgets by 25 percent. Then they should take that 25 percent and give it to the FBI. That agency can try to get back the ripped-off money and can return the government funds to the US Treasury. Maybe we could avoid that big tax increase the administration is lusting after. We have built a government we cannot sustain and obviously government sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac were ripe for the picking.