Despite Promises To Fight Mortgage Fraud, DOJ Basically Ignored It, Then Claimed Success With Faulty Stats

from the terrorism-is-hot dept

A few months ago, we noted that the FBI had quietly admitted that its primary function was no longer law enforcement (as it was supposed to be), but rather "national security." Because fighting terrorism is hot. Putting bankers destroying the economy in jail? Not hot. As we noted at the time, the numbers showed that the FBI was putting a huge part of its budget towards "counterterrorism" (potentially doing much more to destroy your civil liberties than the NSA) and its efforts to take down white collar crime was dropping significantly.

A new report from the Justice Department's Inspector General confirms this finding. It also notes that, despite President Obama and Attorney General Eric Holder promising (yeah, I know...) that cracking down on "mortgage fraud" was a top priority, the FBI has actually put it near the bottom of the list of actual priorities. Say one thing, do another. That sounds mighty familiar.
“In cities across the country, mortgage fraud crimes have reached crisis proportions,” Attorney General Eric H. Holder Jr. said at a mortgage fraud summit in Phoenix in 2010. “But we are fighting back.”

The inspector general’s report, however, shows that the F.B.I. considered mortgage fraud to be its lowest-ranked national criminal priority. In several large cities, including New York and Los Angeles, F.B.I. agents either ranked mortgage fraud as a low priority or did not rank it at all.
Oh, and even better, because of all the hype and talk about mortgage fraud, Congress allocated more budget specifically for that purpose, though it appears to have gone elsewhere.

And that's not all. The DOJ then pretended that it had been fighting mortgage fraud and put on a whole presentation about its success -- based on totally faulty numbers. Numbers that it was pretty sure were faulty -- and then took nearly a year to admit that their claims of success were based on bogus stats:
We further found that, despite receiving significant additional funding from Congress to pursue mortgage fraud cases, the FBI in adding new staff did not always use these new positions to exclusively investigate mortgage fraud. Moreover, when we attempted to assess the effectiveness of the Department’s efforts in pursuing mortgage fraud cases, we found that DOJ could not provide readily verifiable data related to its criminal and civil enforcement efforts. The DOJ’s release of significantly flawed information at a highly publicized press conference in October 2012 regarding the purported success of the FFETF’s and the DOJ’s recent mortgage fraud initiative reflects the lack of accurate data maintained by the Department regarding its mortgage fraud efforts, as well as the Department’s serious failure to adequately vet information that it was presenting to the public. Only days after the press conference the Department had serious concerns over the accuracy of the reported statistics, yet it was not until August 2013 when the Department informed the public that the October 2012 reported statistics were indeed flawed. Moreover, during those 10 months, the Department continued to issue press releases publicizing statistics it knew were seriously flawed. We believe the Department should have been more forthright at a much earlier date about this flawed information.
Somehow, none of this is making me feel any safer.
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Filed Under: doj, eric holder, fbi, mortgage fraud, national security, priorities


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  1. icon
    Ninja (profile), 19 Mar 2014 @ 5:56am

    So we have CBP, DHS, CIA, NSA, NYPD (!!!) and now FBI (along with possibly unnamed letter-soup agencies) dealing with external threats (mostly terrorism) and nobody dealing with non-imaginary crimes that caused much more damage than terrorism alone will ever cause. And, oh why not, regular crime.

    You know what is the problem of the US? They are too busy looking outside while the insides are rotting.

    link to this | view in thread ]

  2. icon
    Ima Fish (profile), 19 Mar 2014 @ 7:40am

    "Putting bankers destroying the economy in jail? Not hot"

    Threatening the wealthy with crimes can have huge consequences. Compare spending your time tilting at windmills to arresting a highly connected billionaire. In which one do you have to stick your neck out? Which one is going to ruin your career if something goes wrong?

    link to this | view in thread ]

  3. identicon
    Anonymous Coward, 19 Mar 2014 @ 7:55am

    Re:

    Don't forget that copyright infringement is now on the same level as being the equivalence of terrorists too according to the way it is treated.

    link to this | view in thread ]

  4. identicon
    Anonymous Coward, 19 Mar 2014 @ 7:59am

    Makes me think of those Babylon5 quote about redefining the problem so there is no problem. Where are my Ministries of Peace and Truth?

    link to this | view in thread ]

  5. icon
    lucidrenegade (profile), 19 Mar 2014 @ 8:01am

    Re:

    Personally, I would go after the billionaire. I'm probably in the minority though.

    link to this | view in thread ]

  6. identicon
    Anonymous Coward, 19 Mar 2014 @ 8:50am

    All failures

    CIA, NSA, FBI, NYPD, ETC... None can do the job they are supposed to, so instead they make up fictitious enemies to claim they are stopping bad guys.

    I would be embarrassed to tell people I work for any of those agencies.

    link to this | view in thread ]

  7. identicon
    Chris, 19 Mar 2014 @ 9:22am

    So here we have funds being misappropriated from their intended usage, and then a cover up and lying about it. Wouldn't this constitute fraud? It's a good thing the FBI is only interested in catching imaginary terrorists, or it might have to arrest some of its own. Like that would ever happen.

    link to this | view in thread ]

  8. identicon
    Slappy, 19 Mar 2014 @ 9:34am

    Mike, if you think yourself a victim of bank fraud, then see a lawyer. As there are at least civil remedies for the same. We can't say nearly the same for some others , as I can't imagine how we'd collect our money damages judgment against Osama & Co for 9/11. The banking/mortgage thing was not otherwise what collapsed this economy. Is why we are having a jobless recovery. Since Steve Jobs and the rest sent your job to China. And so people lived on credit, beyond their means. Add in gas nearly doubling in price and not ever coming down, and, well, here we are, in our jobless recovery. In other words, all some did was to create a bubble to mask the gross deficiency in the more broad economy. Chasing the bubble makers won't solve the underlying problem. Though it might make you feel good. Think with your head and not with your heart. Or cerebral cortex over amygdala.

    link to this | view in thread ]

  9. icon
    Anonymous Howard (profile), 19 Mar 2014 @ 9:38am

    Re:

    That's one of the many problems with the US.
    Too many alphabet soup is bad for your digestion. Also, your economy (just think if only 1 federal police remained (not the fbi, a not-yet-corrupted one), how much of the budget could go to actually useful things, like healtcare and broadband internet development)

    link to this | view in thread ]

  10. identicon
    Anonymous Coward, 19 Mar 2014 @ 9:42am

    Re:

    Nah, they'll just throw people calling attention to the problem down to the pit of consecutive life-sentences instead.

    See also: Swartz, Snowden, Manning and McKinnon.

    link to this | view in thread ]

  11. identicon
    Greg Burton, 19 Mar 2014 @ 9:42am

    Mortgage Fraud Ignored

    Well, it was either...

    *Prosecute the bankers for the toxic mortgage/LIBOR scams that impoverished the world, making homeless, hungry, beggars out of all of us.
    *Stop the Fed from fanning hyper-inflation (QE1, QE2, QE3, QE∞) that will result in food riots, mass starvation.
    *Stop the looting, privatization of the world's social safety net, public space, the commons, imposed "austerity" due to the toxic mortgage/LIBOR/Social Security rip-off scams.
    *Punish the banking cartel's multi-billion dollar drug-money laundering operations.
    *Investigate why jobs and manufacturing are being out-sourced to China, how China came to own most US debt that financed the US war against...China, why China (the oligarchy) is buying up US assets at fire sale prices, even as the US is threatening war against China as it threatens the US economy (national security).
    *Investigate why the US government won't move heaven and earth to stop the radiation spewing from Fukushima, poisoning the US, the northern hemisphere, and investigate the connections between the Fukushima, Stuxnet, HAARP and nuke created earthquakes.
    *Investigate who was really behind 9/11, the false-flag terrorist attack that touched off the serial, never-ending wars of pillage against the nation-states of the world, creating the pretext for the massive police state edifice now threatening the freedoms of everyone.

    OR...

    The US government...

    *Ends food stamps to the poor even though there are no jobs, no social safety net, which will result in the starvation of thousands of Americans.
    *Stands by while the unprosecuted banking and economic crisis destroys the ability of cities and towns to protect their own citizens, fund their police departments. Meanwhile, the Mexican drug cartesl have invaded our country.
    *Confiscates the guns.
    *DHS buys billions of anti-personnel bullets, while giving away "tanks" to US cities and towns.
    *Flys soon to be weaponized drones over everywhere.
    *Allows Israel, a foreign country to run US NSA spying out of Mormon (Freemason/occult) Utah.
    *Pre-positions military hardware in preparation for the coming US melt-down and chaos (COG).
    *Makes being elderly, homeless, jobless, disabled veteran, and hungry a crime (useless eaters).
    *Buys thousands of "FEMA coffins" in anticipation of US mass starvation, Fukushima FEMA camp relocation.

    link to this | view in thread ]

  12. identicon
    Slappy, 19 Mar 2014 @ 10:06am

    Oh, and I forgot one other part, since we didn't have the jobs and didn't have the money, the other part of the bubble was the extension of cheap and easy credit. And why go after the bankers for that, as they don't set the rate of lending, as that would be the Fed. As for why the Fed did what it did, well, the politicos in DC would like to retain power and so be re-elected, and so they too were all for cheap and easy credit. And most keep voting for them still. Leading us all to my two fundamental axioms, to wit, give the people what they want, and so the people get what they deserve.

    By they way, I saw this all coming as early as 2004. You see, in the divorce action, and roughly 1/2 of marriages in end in divorce, there are these income and expense and asset and debt statements that need to be completed and filed with the court. Told me everything that I needed to know re the coming disaster. You simply cannot live the same when your union manufacturing job was shipped to China and now you are the head french fry cook at Mickey D's. Where the cheap and easy credit came in. So some wouldn't have to pay the political consequence for a regime that, for the first time in recorded human history, decided to transfer the majority of its manufacturing overseas. Most empires had the good sense to simply exploit and export the natural resources to back home, where the manufacturing and thus the value added occurred. The consolation is that at least the pundits will be proved wrong, as the purported American Century won't even last half that.

    link to this | view in thread ]

  13. identicon
    Anonymous Coward, 19 Mar 2014 @ 10:14am

    Oh the irony. Congress specifically allocates money to address a fraud that doesn't get addressed and the money instead goes somewhere else while they simply pretend to be addressing the fraud. Lovely. It seems our government's hypocrisy knows no bounds.

    link to this | view in thread ]

  14. icon
    ambrellite (profile), 19 Mar 2014 @ 10:17am

    Re:

    In the spirit of thinking with your head, and not your heart, I encourage you to read up on the root causes of the financial crash of 2008, and associated crimes committed by mortgage lenders and banks. The Libor scandal, robo-signing, MERS, HSBC's money laundering activities, regulatory capture of the SEC and ratings agencies, market manipulation schemes, accounting control fraud, and others that I can't recall of the top of my head. Read what Bill K. Black has to say (former regulator during the S&L crisis) about the financial system's endemic criminality.

    Exacting justice for crimes that stole trillions of dollars of wealth from the general public would make us all feel better, of course, but it would also do much to improve the financial sector so that it produces value to the economy, instead of siphoning it away.

    link to this | view in thread ]

  15. identicon
    zip, 19 Mar 2014 @ 12:18pm

    too big to fail -- or prosecute

    Lanny Breuer, as head of the Criminal Division of the United States Dept. of Justice (and Eric Holder's right-hand man) was in charge of the DOJ's investigation and prosecution of mortgage fraud. As to why his "investigations" went nowhere, despite mountains of evidence of egregious criminal violations of law by the big banks, Breuer basically admitted (on camera, no less!) that his chief concern as prosecutor was not so much enforcing the law, but protecting the health of banks (and ostensibly billionaire bankers) that broke the law.

    Proving once again that no 'good deed' in government ever goes unrewarded, Lanny Breuer left the DOJ for a lucrative job at Covington & Burling, considered the most well-connected law firm in Washington, D.C. -- and among whose biggest clients were **surprise!** the very same banks that were the target of Breuer's (non)prosecution.

    PBS's Frontline did a documentary series on the bank fraud/revolving-door fiasco, "The Untouchables" -- it's well worth watching.

    http://www.pbs.org/wgbh/pages/frontline/untouchables/

    link to this | view in thread ]

  16. identicon
    Anonymous Coward, 19 Mar 2014 @ 12:27pm

    It's pretty clear wealthy Banksters own the justice department. I'm surprised how corrupt the executive branch as become, specifically the DOJ under Eric Holder.

    No accountability for the 2008 financial crisis, means nothing has changed. Ultimately leading to a repeat collapse due to corrupt and wishful thinking on the DOJ and executive branch's behalf.

    I should also mention the Federal Reserve, who thought it was a swell idea to loan more money to the Banksters at 0.01% interest rates for over half a decade. Believing that money would "trickle" back down into the US economy.

    Well guess what. All those bonds got cashed in, and that money was then invested in overseas companies.

    Meanwhile, American 401Ks sink like a rock and US unemployment shoots through the roof. Everyone goes to collage, because that's what everyone's told to do, and when they graduate, they still can't find jobs. Still stuck with the collage debt though, and Congress even changed the law so you can't claim student loans in bankruptcy court. Healthcare either.

    Way to stick it to the American public.

    link to this | view in thread ]

  17. icon
    That One Guy (profile), 19 Mar 2014 @ 12:38pm

    Re:

    Ideally, they get paid so much, and given so much power because of the risks.

    If they're not willing to deal with the big stuff just because they might lose their job or position from the backlash, fire them, replace them with someone with a little more guts and integrity.

    link to this | view in thread ]

  18. identicon
    Anonymous Coward, 19 Mar 2014 @ 1:27pm

    Re:

    IT's not hypocrsiy if their paradox crumple-zones aren't working.

    link to this | view in thread ]

  19. identicon
    Anonymous Coward, 19 Mar 2014 @ 3:33pm

    are you saying the DoJ were less than honest? really? where did the get the stats from? Hollywood?

    link to this | view in thread ]

  20. identicon
    Dan G Difino, 20 Mar 2014 @ 9:45am

    Call a fish a fish

    Everyone call a fish a fish and start pronouncing the acronym 'DOJ' like it looks, 'dodge', because that's all we AMERICANS get from any of them in the end.

    link to this | view in thread ]


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