Financial Fraud

"We will protect Americans from the financial fraud that devastates consumers, siphons taxpayer dollars, weakens our markets, and impedes our ongoing economic recovery. As we’ve seen, the impact of financial crime is not confined to Wall Street—and many times the victims of fraud have worked hard and played by established investment rules, only to see their retirement and life savings vanish at hands of white-collar criminals."
-- Attorney General Eric Holder, April 25, 2011

In order to hold accountable those who helped bring about the financial crisis, as well as those who would attempt to take advantage of the efforts at economic recovery, in November 2009 President Obama established the Financial Fraud Enforcement Task Force. The Task Force is designed to strengthen collective efforts -- in conjunction with our federal, state, and local partners -- to investigate and prosecute significant financial crimes relating to the current financial crisis; to recover ill-gotten gains; and to ensure just and effective punishment for those who perpetrate financial crimes. With more than 20 federal agencies, 94 US Attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. The Task Force has established Financial Fraud Coordinators in every US Attorney’s Office around the country to help make these broad mandates a reality on the ground.

Further Efforts Of The United States Attorneys To Combat Fraud

As Attorney General Eric Holder stated, combating fraud is a high priority goal for the Department of Justice and the 94 United States Attorney’s offices across the country. From mortgage scams that target the elderly, to Ponzi schemes that shock the world, to procurement frauds that steal money from our nation’s coffers, to predatory lending that discriminates against vulnerable communities, to securities fraud that undermines the trust and transparency of our markets, the United States Attorneys’ offices have substantially increased the number of fraud prosecutions nationwide.

Fraud schemes prosecuted include, but are not limited to:

  • Bankruptcy Fraud:
    • Concealment of Assets and Perjury: Debtor files bankruptcy but conceals assets and makes false statements under penalty of perjury on documents filed in bankruptcy case or in testimony in bankruptcy proceedings.
    • Serial Filings: Debtor files bankruptcy cases, one after another, to take advantage of the rules that would delay foreclosure and collection on other debts, with documents filed in the bankruptcy case that fail to list previously filed bankruptcies, or contain other false information.

  • Grant Fraud: Grant funds are awarded for a specific “public purpose” and grantees must use those funds as agreed. Grant fraud is theft of funds through false statements or conversion.

  • Identity Theft: A person’s identifying information is obtained, often through theft of mail or computer hacking, to fraudulently obtain money, goods and services.

  • Mortgage Fraud:
    • Loan Origination Fraud: Real estate loans obtained by providing false information to the lender, allowing borrowers to qualify for loans for which they otherwise would not be eligible.
    • Builder Bailout Schemes: Homebuilders with excess housing inventory artificially prop- up home prices and defraud lenders, by artificially inflating the sale price by providing a large rebate to buyers and concealing the rebate from the lender.
    • Short Sale Fraud: Perpetrator arranges for a borrower’s short sale and an undisclosed immediate sale to another person for a higher price, falsely telling the original lender that the lower price was the highest offer.
    • Foreclosure Rescue and Loan Modification Fraud: Perpetrator, sometimes an attorney, promises a financially troubled homeowner that they can prevent foreclosure or obtain a home loan modification for the homeowners, does nothing for the homeowner, yet takes a significant advance fee or even steals the title to the home.
    • Foreclosure Sale Bid Rigging Fraud: Agreement among real estate investors at foreclosure auctions to eliminating competition in order to buy property at artificially reduced prices.

  • Procurement Fraud: Fraud against the government relating to the procurement of goods and services.

  • Public Corruption: The abuse of public office to obtain private gains for the officeholder or others.

  • Securities Fraud: Fraud committed in connection with investments, including Ponzi schemes, sales of investments through false statements, market manipulation or “pump and dump” fraud, accounting fraud, or insider trading.