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Feds announce more than 100 prosecutions in mortgage fraud surge

TAMPA — An intensive, nine-month federal investigation of mortgage fraud that stretched from Jacksonville to Tampa and Fort Myers has resulted in charges against 105 people, authorities said Tuesday.

U.S. Attorney A. Brian Albritton called Florida ground zero for mortgage fraud in the nation. He released details of an investigative "surge" in May, saying the goal was to restore confidence in the real estate market and send a message that "mortgage fraud won't be tolerated."

"This is by no means the end of vigorous mortgage fraud prosecution in the Middle District of Florida," Albritton said at a news conference Tuesday, where he touted the successful effort.

He warned that those who lie on mortgage applications will face stiff penalties, which could include up to 30 years in prison.

"You will be caught, you will be prosecuted and subject to significant jail terms," Albritton said.

The U.S. Attorney's Office said 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.

Those charged in the surge range from multiple borrowers to real estate and title agents, investors and the president and owners of mortgage companies.

Tampa Bay area banks reported $213 million in losses from mortgage fraud in the last fiscal year, said Tampa FBI Special Agent in Charge Steven Ibison. That accounts for about 8 percent of the losses nationally due to mortgage fraud, he said.

"Losses that were once unthinkable are now becoming commonplace," Ibison said.

Albritton required each of his prosecutors to handle a mortgage fraud case, in addition to their regular workload.

In Tampa, the surge netted 30 defendants, who authorities said caused fraudulent mortgages that totaled more than $103 million on 313 bay area properties.

The St. Petersburg Times has previously reported on several cases in the Tampa surge, including charges against former 2nd District Court of Appeal Judge Thomas E. Stringer Sr. and convicted telemarketing tycoon Peter Porcelli.

Stringer pleaded guilty to lying on a loan application in 2004. He claimed that none of the money used for the down payment on a home in Hawaii was borrowed, when in fact he had gotten cash from someone else. He resigned from the bench in February amid questions about his financial dealings with a stripper. Stringer has worked out a deal with prosecutors to avoid prison. He's scheduled to be sentenced next week.

Porcelli of Oldsmar has been indicted on a mail fraud charge involving a mortgage foreclosure program. He's already serving 13 years in prison for a credit card scam that victimized tens of thousands of credit-poor consumers nationwide.

Seven cases among the 105 charged individuals remain sealed, but Albritton said those should become public soon.

Feds announce more than 100 prosecutions in mortgage fraud surge 11/03/09 [Last modified: Wednesday, November 4, 2009 9:39am]
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