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Robert Trigaux

If Florida is 'ground zero' for mortgage fraud, are we doing enough to stop (and police) it?




Wake up and good morning. The news of a massive mortgage fraud crackdown may have gotten lost in Tuesday's local elections news. But once again we heard that infamous one-liner: Florida is ground zero for mortgage fraud.

U.S. Attorney A. Brian Albritton (in photo) repeated the "ground zero" claim Tuesday in detailing an intensive, nine-month federal investigation of mortgage fraud that stretched from Jacksonville to Tampa and Fort Myers. So far, the investigation's has resulted in charges against 105 people. Here's the St. Petersburg Times take on the story.

Tampa has produced 30 cases, Jacksonville 24, Orlando 19 and Fort Myers 32. Here's a list of all the defendants.

According to Times coverage, the joint investigation with the FBI and other federal and state agencies involved more than $400 million in loans procured by fraud on more than 700 properties. Among those charged: multiple borrowers to real estate and title agents, investors and the president and owners of mortgage companies.

Of particular interest is Tampa FBI Special Agent in Charge Steven Ibison statement that Tampa Bay area banks reported $213 million in losses from mortgage fraud in the last fiscal year. Said Ibison:

"That accounts for about 8 percent of the losses nationally due to mortgage fraud. Losses that were once unthinkable are now becoming commonplace."

Albritton spoke of wrapping up a "surge" of investigative resources to accelerate the pace of the Florida crackdown on mortgage fraud. Notably, Albritton held press events in different metro markets of the state to underscore where the investigations were most focused. Here's a quick rundown:

* In Fort Myers, where the housing market has especially crumbled, federal prosecutors indicted or arrested 32 defendants in the last nine months — the most among the four offices that report to Albritton. Agents want to use the 32 as witnesses in bigger cases against more influential financial players. "To some extent, this is just the tip of the iceberg," Albritton told the Fort Myers News-Press. "You’ll be seeing more defendants and more complex cases."  Here's the News-Press story.

* According to Naples news coverage, FBI Special Agent Ibison blamed "out of control greed" for the fraud epidemic, saying mortgage frauds dwarf the savings and loan crisis in the 1980s and 1990s. Total losses aren’t known because only those banks that are federally insured are required to report them. More coverage here.

As a column in the Fort Myers paper says, we know we're ground zero: "We're living this mess." Tell us something we don't know. And don't take the pressure off the investigations.

-- Robert Trigaux, Times Business Columnist




[Last modified: Tuesday, June 1, 2010 11:26am]


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