This report speaks for itself.
The OIG basically
concluded that mortgage fraud was a low priority in the years reviewed and the
information released by the Department of Justice was inaccurate.
Summary Report by the Office of Inspector General of the
Department of Justice dated March 13, 2014
The Department of Justice Office of the
Inspector General (OIG) today released a report examining the Department of
Justiceís (DOJ) approach to and enforcement efforts in addressing mortgage
fraud between fiscal years (FY) 2009 and 2011.
The OIG found some examples
of DOJ led efforts to prioritize the investigation and prosecution of mortgage
fraud cases, including the Criminal Divisionís leadership of its mortgage
fraud working group and the Federal Bureau of Investigationís (FBI) and United
Officesí participation on more than 90 local task forces and working groups.
However, we also found that DOJ did not uniformly ensure that mortgage fraud was
prioritized at a level commensurate with DOJís public statements about the
importance of pursuing financial frauds
cases in general, and mortgage fraud cases in particular. The OIG further found
significant deficiencies in DOJís ability to report accurately on its mortgage
Specifically, the OIG found
that the FBI ranked mortgage fraud as the lowest ranked criminal threat in its
lowest crime category.
While the FBI received $196 million in appropriated funding to investigate
mortgage fraud activities from FYs 2009 through 2011, in FY 2011 the number of
FBI agents investigating mortgage fraud as well as the number of pending
The OIG attempted to
review the scope of DOJís prosecutorial efforts to address mortgage fraud by
reviewing case data. However, DOJ could not provide readily verifiable data
related to its criminal enforcement efforts because of underreporting and
misclassification of mortgage
fraud cases in the case management system used by the Executive Office for
United States Attorneys (EOUSA). Similarly, the OIG found that EOUSA was unable
to provide any data related to DOJís civil enforcement efforts because the
EOUSA case management system is
unable to specifically identify civil mortgage fraud cases.
The report also assesses an
incident that reflected the Departmentís inability to report accurately on its
mortgage fraud efforts: DOJís October 2012 release of significantly flawed
information during a highly publicized press conference about the success of the
Homeowners Initiative, a mortgage fraud initiative of the DOJ and the Financial
Fraud Enforcement Task Force (FFETF). According to an August 2013 FBI
memorandum, the statistics presented at the press conference had reported
approximately five times the actual number of
criminal defendants charged as part of the initiative, and ten times the actual
total estimated losses associated with Distressed Homeowners cases. The OIG
found that neither DOJ nor the FFETF had an established methodology for
obtaining and verifying the criminal mortgage fraud statistics announced during
the press conference.
The OIG also found that although the Department was aware that the statistics
were seriously flawed no later than November 2012, it
did not inform the public that the reported statistics were flawed until August
2013, and it cited the flawed statistics in numerous press releases during the
intervening 10 months.
According to DOJ officials,
the data collected and publicly announced for an earlier FFETF mortgage fraud
initiative ĖOperation Stolen DreamsĖalso may have contained similar errors,
as a similar collection methodology was employed for the statistics publicly
reported for this
The report makes seven
recommendations to help DOJ improve its understanding, coordination, and
reporting of its efforts to address mortgage fraud. DOJ has concurred with all
The full report can be found
at the OIG's website at: