Fraud



The FBI said its 1,204 pending mortgage fraud cases resulted in 321 indictments, 206 convictions, $595.9 million in restitution orders, and $21.8 million in recoveries in 2007.

The Bureau’s Financial Crimes Report to the Public, Fiscal Year 2007 said 80% of all reported mortgage fraud losses involved collusion or collaboration by industry insiders. The FBI says the true level of mortgage fraud is probably unknown because of a lack of mandatory reporting in much of the industry. In addition, the repackaging and sale of mortgages on the secondary market can conceal and distort the fraud, causing it to go unreported.

Among other statistics in the report:

The FBI pursued 529 corporate fraud cases, several of which involve losses to public investors that individually exceed $1 billion.

FBI securities and commodities fraud cases increased to 1,217 in 2007 from 937 in 2003, and resulted in $24 million in recoveries, $1.7 billion in restitution orders, and $202.7 million in fines in 2007.

The FBI investigated 548 money laundering cases, resulting in 141 indictments, 112 convictions, $66.9 million in restitution orders, $2.2 million in recoveries, and $11.4 million in fines.

The report is available at www.fbi.gov/publications/financial/fcs_report2007/financial_crime_2007.htm .

Suspicious Activity Reports related to mortgage fraud grew 42% in 2007, according to The SAR Activity Review—By the Numbers, Issue 10 , compiled by the Financial Crimes Enforcement Network. Although growth of SARs related to mortgage fraud was off from the peak growth of 93% in 2004, reports have increased more than 40% in each of the last three years.

FinCEN reported a 7% drop in reported instances of terrorist financing in 2007. This area has been trending down since 2004.

Growth of SARs from money services businesses slowed to 17% in 2007, down from 41% in 2004 and 29% in both 2005 and 2006. The U.S. Postal Service, which accounted for 24% of all reports from money services businesses, saw a 102% spike in total reports in 2007. Money orders constituted 40% of all SARs by money services businesses. The Postal Service issues more than 500,000 money orders daily.

The report is available at www.fincen.gov .

 

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