As evidenced by these announced arrests and indictments, mortgage fraud is a significant crime problem in Nevada. Mortgage fraud has likely accelerated the recent decline in the Las Vegas housing market. As of February 2008, Nevada was the top state in the nation for investor-owned mortgage defaults.

While the vast majority of practioners are honest, mortgage fraud schemes are being orchestrated by individuals within the industry such as: mortgage bankers/brokers, loan officers, realtors, title/escrow officers, appraisers, and other industry related personnel. These schemers have contributed significantly to the demise of the real estate market in Las Vegas and have inflated entire new developments by establishing bogus comparatives. For example, the schemers utilize straw buyers or stolen identities to flip the houses between each other. The schemers make payments on the properties for a short period of time and then allow the house to go into foreclosure. This establishes inflated comps which are used within the real estate industry to establish appraisal values. The end result is that home buyers purchase properties in communities that are greatly over valued, and they are then unable to sell or re-finance the property, eventually leading to foreclosure. The lending institution or the federal government is left to suffer massive economic losses.

To combat this criminal activity, the Las Vegas Division of the FBI has created the Southern Nevada Mortgage Fraud Task Force, which is housed in FBI office space. The following law enforcement partners have allocated investigators to this task force: the Las Vegas Metropolitan Police Department, Internal Revenue Service-Criminal Investigation, the Housing and Urban Development and Social Security Administration-OIGs, United States Postal Inspection Service, and the Nevada Attorney General's Office. Further, the United States Attorney's Office has designated an Assistant United States Attorney to work full time on task force matters.

The Las Vegas FBI has an excellent working relationship with each of these participating agencies, and we continue to look forward to leveraging each agency's strengths to combat mortgage fraud.

A telephone hotline has been established to receive complaints concerning potential mortgage fraud. The telephone number is 702-584-5555.

Thank you.

Mortgage Fraud Indictments of March 13, 2008