FBI Announces Mortgage Probe

Posted By: Michael King

Reported By: Kevin Rowson

ATLANTA -- Federal agents are calling Metro Atlanta, but for all the wrong reasons. When it comes to mortgage fraud, you have a good chance of becoming a victim in Georgia.

In Washington, the FBI announced Operation Malicious Mortgage -- which has already made several hundred arrests.

Atlanta was the number one area in the country for mortgage fraud a few years ago. Today it is number six, but that is still not good enough as local FBI officials announced on Thursday.

The FBI in Atlanta has arrested more than 60 people in the past four years -- over 100 have been prosecuted in Atlanta's federal courts.

You've seen the sketches, you've seen the neighborhoods torn apart by over-inflated homes.

"We've had whole neighborhoods of all kinds from inner city low income neighborhoods to the nicest golf course gated communities just be devastated by mortgage fraud," said US Attorney David Nahmias.

On Wednesday, seven arrests were made in a mortgage fraud scheme that gutted a $3 million condo complex in DeKalb County.

The people who rent there and the people who live in any neighborhood racked by fraud are the immediate victims. The FBI says the problem is growing, and so are their efforts to stop it.

"Efforts are underway to redirect investigative resources within the FBI to the named cities most dramatically impacted by this and to secure additional resources in the upcoming budgets," said FBI Special Agent In Charge Greg Jones.

The people involved in mortgage fraud range from straw buyers to closing attorneys to brokers to appraisers to loan officers and real estate agents. What they are slowly learning is that the penalties can be a deterrant -- as much as 30 years in federal prison.

"That's more time than Bernie Evers got for Worldcom or Jeff Skilling got for Enron," Jones said. "And that word got out in the legal community and we think it has some effect that deter people in these schemes."