Thank you all for being here. Today’s summit marks another important step in our aggressive, comprehensive, and collaborative effort to combat mortgage fraud and protect American homeowners.
Here in Phoenix, and in cities across the country, mortgage fraud crimes have reached crisis proportions. But we are fighting back. And with the Financial Fraud Enforcement Task Force that President Obama created last November, we’re tackling the challenges and consequences of mortgage fraud in bold, innovative, and coordinated ways.
The Justice Department is honored to lead this historic initiative. And we’re proud to work in partnership with the FBI, with agencies across the federal government, and with state and local law enforcement offices. Here in Arizona, we’re fortunate to have the strong leadership of U.S. Attorney Dennis Burke and Attorney General Terry Goddard. And we’re all grateful for the outstanding work of Assistant Attorney General Tony West, who heads the Justice Department’s Civil Division, and U.S. Attorney for the Eastern District of California, Ben Wagner, who both serve as co-chair of the Task Force’s Mortgage Fraud Working Group.
Through this broad federal, state, and local coalition, we’re using every tool at our disposal – including advanced technologies, new communication platforms, and the very best talent we have – to prevent, to prosecute, and to punish mortgage fraud crimes. And we’re making meaningful progress in our work to protect families and communities, to combat discrimination in our lending markets, to recover proceeds for fraud victims, and to restore confidence in our housing and financial markets.
Now, in recent weeks, we’ve seen some encouraging signs that our economy is improving. But we also know that millions of Americans are still struggling to cope with the housing crisis that has devastated so many neighborhoods and families.
This morning, we heard from victims and industry experts about how mortgage fraud crimes are evolving and about the pain caused by these schemes. And, this afternoon, the task force will hear from local law enforcement representatives who will offer their recommendations on how we can respond quickly and fight back most effectively.
This discussion is critical. We will use information gained here in Phoenix – and in other epicenters of mortgage fraud – to focus and strengthen our law enforcement activities. Mortgage fraud schemes must be stopped in their tracks. And those willing to exploit our national financial crisis for personal gain will be brought to justice.
In fact, right now, the FBI is investigating more than 2,800 mortgage fraud cases, up almost 400 percent from five years ago. And, with additional resources, we will be able to enhance and expand current efforts. Today, I’m pleased to announce that new investments included in the FY 2010 budget will soon be distributed to combat mortgage fraud. This spring, we expect nearly $8 million to be allocated for this work, and nearly $2 million of this funding will go to Arizona. I’m confident that these new investments will allow us to build on the recent success we’ve seen across the country and the progress that’s been made here in Arizona.
Just last week, Attorney General Goddard announced a $120,000 settlement with several defendants for their roles in a real estate scheme in Pima County. And two days earlier, Mario Bernadel – the leader of a massive fraud scheme here in Phoenix – was sentenced to 17 years in federal prison. He and his co-conspirators had used fraudulent documents to buy nearly 40 properties, resulting in more than $9 million in losses to this city’s banks. Like so many others, Mr. Bernadel had seen mortgage fraud as a pathway to riches. Instead, it proved to be his ticket to jail.
Let his case be a lesson to those who would engage in mortgage fraud schemes: You will be found. You will be prosecuted. And you will be punished.
Let this case, and this summit, also send a message to mortgage fraud victims: We are working tirelessly to restore what you’ve lost and to rebuild the trust that will drive our nation’s economic recovery.
Thank you all for you partnership in this work and your historic commitment to protecting the American people.