financial fraud Enforcement task Force Announces Regional Results of "Operation Stolen Dreams" Targeting mortgage Fraudsters
Following an announcement today by Attorney General Eric Holder in Washington, DC, representatives of the Financial Fraud Enforcement Task Force in Nashville, including U.S. Attorney Jerry E. Martin; Perrye K. Turner, Acting Special Agent in Charge of the FBI’s Memphis Division; Sara Beth Pulliam, Special Agent in Charge, Nashville Division of the United States Secret Service; Christopher R. Pikelis, Special Agent in Charge, IRS Criminal Investigation-Nashville Field Office; Martin P. Phanco, Inspector in Charge, United States Postal Inspection Service; and Greg Gonzales, Commissioner, Tennessee Department of Financial Institutions, announced the regional results of the nationwide takedown, Operation Stolen Dreams, which targeted mortgage fraudsters in the Middle District of Tennessee and throughout the country.
The sweep was organized by President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on March 1, to date Operation Stolen Dreams has involved 1,215 criminal defendants nationwide, including 485 arrests, who are allegedly responsible for more than $2.3 billion in losses. Additionally, to date the operation has resulted in 191 civil enforcement actions which have resulted in the recovery of more than $147 million.
“Mortgage fraud ruins lives, destroys families and devastates whole communities, so attacking the problem from every possible direction is vital,” said Attorney General Holder. “We will use every tool available to investigate, prosecute, and prevent mortgage fraud, and we will not rest until anyone preying on vulnerable American homeowners is brought to justice.”
“Mortgage fraud continues to pose a significant threat to lenders, investors, residential real estate values, and the U.S. economy,” said United States Attorney Jerry E. Martin. “The United States Attorney’s Office is committed to its responsibility to aggressively investigate and prosecute mortgage fraud and other significant financial crimes. To that end, we will continue to rely heavily on the strong relationships we have with both our law enforcement and regulatory agency partners.”
“Operation Stolen Dreams is a great example of how the FBI works closely with fellow law enforcement and regulatory agencies to target those who criminally manipulate the financial system, in particular the mortgage industry, for personal gain,” said Perrye K. Turner, Acting Special Agent in Charge of the FBI’s Memphis Division. “We will continue working together to bring them to justice and hold these fraudsters accountable for their actions.”
“Both individuals and businesses have been victimized by the significant increase in financially motivated, fraudulent schemes involving the real estate, banking, and a variety of other industries the American taxpayers have come to rely on during these trying economic times,” said Christopher R. Pikelis, Special Agent in Charge, IRS Criminal Investigation-Nashville Field Office. “As the public has seen, mortgage fraud, other financial and related financial crimes add to the underground economy, threaten the financial health of our communities, and undermine the tax system that law abiding and hard- working citizens pay into each day. These types of crimes drive innocent, trusting, and unsuspecting buyers and other victims into foreclosure, ultimately leaving lenders burdened with bad loans, and neighborhoods with abandoned and deteriorating properties, susceptible to a variety of other crimes and criminal activities. IRS Criminal Investigation, working cooperatively with our fellow law enforcement and prosecutorial partners, is committed to aggressively investigating and ultimately prosecuting those associated with these types of financially motivated crimes that wreak financial havoc on the American citizen and our communities.”
“The TN Dept of financial institutions has worked closely with the United States Attorney, the FBI and other law enforcement agencies in the effort to stop mortgage fraud,” said Greg Gonzales Commissioner of the Tennessee Department of Financial Institutions. “I want to commend those law enforcement agencies for their work and confirm that we are glad that we are able to play a part. Our statutory mission is to provide for a safe and sound system of financial institutions and Operation Stolen Dreams strongly contributes to that goal.”
Unlike previous mortgage fraud sweeps, Operation Stolen Dreams focused not only on federal criminal cases, but also on civil enforcement, restitution for victims and increasing cooperation with state and local partners.
The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit StopFraud.gov.
Operation Stolen Dreams cases in the Middle District of Tennessee included, among others:
United States v. Jerome Henderson, Jr. – Henderson, 37,of Clarksville, Tennessee, was indicted on April 21, 2010 on charges of mortgage fraud, bank fraud, and aggravated identity theft in a scheme to defraud mortgage lenders and financial institutions of more than $1,500,000. From March 2005 through May 2007, Henderson submitted multiple fraudulent mortgage loan applications to various lenders for the purchase of residential properties in and around Nashville and Clarksville, Tennessee. The multiple mortgage loan applications submitted to lenders by Henderson contained material misrepresentations about Henderson’s income, assets, and his financial suitability to qualify for a loan. To support the fraudulent loan applications, Henderson provided lenders with fictitious and forged documents that he created, including false social security numbers, a forged Army Contractor Badge, forged W-2 forms, and false bank statements that purported to show fictitious direct deposit amounts into nonexistent bank accounts bearing his name.
United States v. Keith Churn – Churn, 41, of Nashville, Tennessee, was indicted on May 5, 2010 on charges of bank fraud in a scheme to defraud lenders by recruiting straw purchasers to secure construction loans. Churn, doing business as C&M Construction Management, recruited two individuals to enter into separate construction loans with a Nashville lender totaling $414,300. The loans were used to purchase the real property which Churn was supposed to improve by erecting modular homes. Churn promised the straw buyers that he would make the mortgage payments and construct the homes, and sell the properties for a profit. However, Churn never erected the homes. Instead, he presented fraudulent documents to the bank to obtain draws on the construction loans for work that was not performed. The straw buyers were unable to make the mortgage payments and defaulted on the loans. The total loss to the bank after foreclosure was $238,926.92.
United States v. Jarrod Jordan and Charles Mikan Harris– Jordan, 30, worked as a loan officer with a federally insured bank located in Centerville, Tennessee. As a loan officer, Jordan had authority to approve mortgage loans. According to the indictment obtained today, Harris, 32, a Centerville businessman, and Jordan, along with others, engaged in a “bribes-for-loans” scheme in which they conspired to obtain loans that were based on false and misleading information regarding the borrower’s financial background, the security for the loan, or the purpose of the loan. When Harris and others obtained these loans through Jordan, they knew they could not have received them through legitimate means. To influence and reward Jordan for approving the loans, Harris and other paid Jordan a bribe for each loan, which Jordan accepted. As a result of the fraudulent “bribes-for-loans” scheme, all of the fraudulently obtained loans eventually defaulted. The victim bank, which is insured by the FDIC and which offers commercial loans and traditional mortgage lending to its customers, suffered losses totaling $1.5 million dollars.
Stop Medicare Fraud
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