‘Exponential rise’ in mortgage fraud seen by FBI
The economic crisis has sparked an increase in criminal fraud, including an “exponential rise” in mortgage scams that is straining the FBI’s resources, a leader of the agency said.
The Federal Bureau of Investigation has more than 1,800 open investigations into mortgage fraud, more than double the number in fiscal 2006, Deputy FBI Director John Pistole told a U.S. Senate hearing today in Washington. The FBI also has more than 530 open corporate fraud investigations, including 38 linked to the financial crisis, he said. The FBI has reassigned some agents from terrorism cases to financial crimes.
The government’s $700 billion Troubled Asset Relief Program [TARP], and proposed economic stimulus legislation, likely will result in increased criminal activity, said Neil Barofsky, special inspector general of the TARP program, in prepared testimony.
“History teaches us that an outlay of so much money in such a short period of time will inevitably draw those seeking to profit criminally,” he said.