A nine-month investigation has resulted in charges against 32 defendants, more than $25 million in loan amounts procured by fraud and involved 51 properties in Fort Myers, U.S. Attorney A. Brian Albritton announced Tuesday morning during a news conference in downtown Fort Myers.
The mortgage fraud surge investigation began in late January with the U.S. Attorney’s Office for the Middle District of Florida and the Federal Bureau of Investigation in Tampa and Jacksonville collaborating their efforts in identifying, investigating and prosecuting mortgage fraud in its entirety.
The Internal Revenue Service’s Criminal Investigation, U.S. Secret Service, U.S. Housing and Urban Development/Office of Inspector General, U.S. Postal Inspection Service, Florida Department of Law Enforcement, Florida Department of Financial Services/Division of Insurance Fraud, Florida Office of Financial Regulation, Florida Department of Business and Professional Regulation, Lee County Sheriff’s Office, Collier County Sheriff’s Office and Brevard County Sheriff’s Office also participated in the joint effort of the investigation.
According to a prepared statement released by the Department of Justice, mortgage fraud “is a material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan.”
Mortgage fraud can be divided into two categories: fraud for property and/or housing or fraud for profit.
The Middle District of Florida Mortgage Fraud Surge investigation focused on fraud for profit, which consists of multiple loans, along with elaborate schemes to gain “illicit proceeds from property sales.”
Although Florida is considered ground zero for mortgage fraud, it was ranked number two in fraud as of 2008, behind Rhode Island. Florida has the highest mortgage delinquency rates in the nation.
Fort Myers had the smallest office during the investigation, but through its efforts it handled more cases than any other districts in Florida, Albritton said.
The defendants in the Fort Myers area who were charged consisted of real estate brokers, multiple borrowers, Realtors, sellers, bank branch managers, bank employees, licensed contractors, mortgage brokers and loan originators.
Albritton said the investigation translates a clear message to those who engage in mortgage fraud. The message that the investigation illustrates it that it is not tolerated and serious federal charges will be pressed against offenders.
He explained during the news conference that mortgage fraud is very unique to the Middle District of Florida because the state is dependent on real estate due to its livelihood.
The mortgage fraud is a reflection of the growth Florida has experienced.
Steven E. Ibison, FBI special agent in charge of the investigation, said the loosely organized groups of individuals who are involved with mortgage fraud do it because of greed.
He said the FBI is already developing new ways on how to identify mortgage fraud, so that agencies are able to be a step ahead of those who are trying to find new ways of getting money.
Ibison said mortgage fraud is still happening because criminals will continue to think of ways to make money illegally.
Mortgage fraud, which is investigated by the FBI, can be punished by up to 30 years in federal prison, a $1 million fine or a combination of both.
Mortgage fraud has a trickle effect on homeowners, mortgage lenders, neighborhoods and property owners.
The investigation, which ended Saturday, involved more than 100 defendants, more than $400 million in total loans and more than 700 properties in the Fort Myers, Orlando, Tampa and Jacksonville districts.