Iowa mortgage fraud gets prosecutors' attention

State and federal law officers and prosecutors in Iowa today announced a new joint initiative in Iowa's U.S. southern judicial district to identify, investigate and prosecute mortgage fraud.

U.S. Attorney Nicholas A. Klinefeldt and Iowa Attorney General Tom Miller said mortgage fraud is less of a problem in Iowa compared to other states and they want to keep it that way. At the same time, the prosecutors said they believe their working group will act as a deterrent to send the message that Iowa is a bad place to attempt to defraud people or engage in bogus loan practices or finance schemes.

“This new partnership between my office and the U.S. Attorney's office will help us take some of the most egregious mortgage fraud cases to the next level,” Miller told a news conference. “There are some situations where civil enforcement efforts simply are not enough to punish the wrongdoers. We look forward to working with the U.S. attorney to ensue that criminal enforcement tools are also available.”

Weysan Dun, a special agent in charge for the Federal Bureau of Investigation's Iowa and Nebraska division in Omaha, said federal agents are aggressive tackling mortgage fraud as a top priority and currently have 21 pending cases involving about 50 people under investigation for fraudulent activities with estimated losses of $31 million. In the past year, he said there have been 15 people indicted for mortgage fraud in Iowa and nine of those have either pleaded guilty or been convicted of criminal charges.

The criminal penalties associated with mortgage fraud vary according to the particular charge, but the most common federal charges of bank fraud, wire fraud, mail fraud and false statements to a bank carry maximum terms in prison of 30 years and fines of up to $1 million.

The Office of Inspector General within the U.S. Department of Housing and Urban Development also is participating in the state-federal effort to combat mortgage fraud in Iowa, officials said.