A Perp Walk for a Purpose
Yes, I know, I seem obsessive about this, but now the video’s up of today’s perp walk for the former Bear Stearns managers charged with securities fraud stemming from the subprime-mortgage related collapse of their hedge funds. Take a look here; this stuff is really good. They handcuff one of the perps and make sure the cameras can get a closeup, then they push the other one’s head down to put him in the police car, just like they do it on T.V. It’s a big day for mortgage fraud besides this, considering the FBI arrested about 400 other people in “Operation Malicious Mortgage,” which the agency described as “a national takedown of mortgage fraud schemes.”
Here’s the FBI’s description of those schemes:
Mortgage frauds employ a variety of tactics including misrepresentations, deceit and other criminal abuses to fund, purchase or insure mortgage loans. Operation Malicious Mortgage addresses primarily three types of mortgage fraud schemes: lending fraud, foreclosure rescue scams and mortgage-related bankruptcy schemes. Lending fraud frequently involves multiple loan transactions in which industry professionals construct mortgage transactions based on gross fraudulent misrepresentations about the borrower’s financial status, such as overstating the borrower’s income or assets, using false or fictitious employment records or inflating property values. Foreclosure rescue scams involve criminals who target legitimate homeowners in dire financial circumstances and fraudulently collect fees for foreclosure prevention services or obtain ownership interests in residential properties. Both of these fraudulent mortgage schemes may be furthered by filing bankruptcy petitions that automatically stay foreclosure.
Federal authorities aren’t doing all this for fun. They’re sending a message that they’re taking this seriously. It would have been nice to see some aggressive action a lot sooner, but it’s hard to complain on a day like today. Plenty of people believe mortgage fraud was rampant at the end of the housing boom, both among borrowers and lenders and financial institutions. The Feds, finally, are showing that they’re not going to let it go, and in dramatic fashion. Wonder if they’ll try a perp walk for 400?