Government Steps Up Its Mortgage Fraud Probe

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The Justice Department has expanded its ongoing effort to uncover the mortgage fraud and abuse that helped precipitate the 2008 financial crisis, offering substantial financial help to corporate insiders willing to serve as whistleblowers.

The department's Residential Mortgage-Backed Securities (RMBS) working group announced new resources Thursday in an ongoing effort to investigate misconduct, including the launch of a website to report fraud, the creation of a coordination team to facilitate investigations under way around the country, and a solicitation of insiders to help in those probes.

The RMBS website is a new call to those insiders who know about fraud that occurred in the RMBS market, who know it's time to expose that fraud, and who want to help us hold accountable those individuals and institutions who broke the law in pursuit of bigger paydays, said acting Associate Attorney General Tony West.

Although the working group and its members have done a tremendous amount of investigative work already - including having issued more than 25 civil subpoenas - we know that hearing from insiders is particularly valuable, he said. There are scores of people who worked in the RMBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy. We want to hear from them.

The RMBS working group of the Financial Fraud Enforcement Task Force was established by Attorney General Eric H. Holder Jr. in January and has been dedicated over the past three months to initiating, organizing and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market. …