Justice Department overstated efforts to prosecute mortgage fraud, watchdog says

03/13/2014 4:37 PM

03/13/2014 4:37 PM

The Justice Department didn’t ensure that mortgage fraud cases in the wake of the 2008 financial crisis were made a priority at a level equal to its public statements, an internal watchdog said in a report released Thursday.

The number of FBI agents working on mortgage fraud cases decreased in 2011 even though Congress allocated $196 million for fiscal years 2009 to 2011 to pursue such conduct, according to the report released by Inspector General Michael Horowitz. The FBI ranked mortgage fraud as the lowest criminal threat during that time.

The Justice Department “did not uniformly ensure that mortgage fraud was prioritized at a level commensurate with DOJ’s public statements about the importance of pursuing financial frauds cases in general, and mortgage fraud cases in particular,” the inspector general’s office said in a statement.

The report echoes a claim by federal law enforcement last year that President Barack Obama’s administration significantly overstated statistics from a yearlong mortgage fraud initiative in the weeks before the 2012 presidential election. The Justice Department has since corrected its results.

The FBI restated the number of people criminally charged to 107 from 530. Agencies were asked to correct victims’ total losses to $95 million from an estimated $1 billion and the number of victims found to 17,185 from more than 73,000.

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