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Operation Stolen Dreams Nets Four Montgomery County Residents in Alleged $7.5 Million Mortgage Fraud Scheme Involving Purchase of Calibre Homes;

Financial Fraud Enforcement Task Force Announces Regional Results of “Operation Stolen Dreams” Targeting Mortgage Fraudsters
Operation Stolen Dreams Nets Four Montgomery County Residents in Alleged $7.5 Million Mortgage Fraud Scheme Involving Purchase of Calibre Homes; Former REMAX Realtor Indicted in Yet Another Multi-Million Dollar Scheme

HOUSTON—Following an announcement today by Attorney General Eric Holder in Washington, D.C., representatives of the Financial Fraud Enforcement Task Force in Houston, including U.S. Attorney José Angel Moreno along with FBI Houston Field Division Special Agent in Charge Richard C. Powers, Special Agent in Charge Rodney E. Clarke of the Internal Revenue Service-Criminal Investigations (IRS-CI), United States Secret Service (USSS) Special Agent in Charge Timothy Foley of the Houston Field Office and Housing and Urban Development-Office of Inspector General (HUD-OIG) Assistant Special Agent in Charge Kedric McKnight announced the results of the nationwide takedown, Operation Stolen Dreams, which targeted mortgage fraudsters in the Southern District of Texas (SDTX) and throughout the country and is the largest collective enforcement effort ever brought to bear in confronting mortgage fraud.

The sweep was organized by President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on March 1, to date Operation Stolen Dreams has involved 1,215 criminal defendants nationwide, including 485 arrests, who are allegedly responsible for more than $2.3 billion in losses. Additionally, to date the operation has resulted in 191 civil enforcement actions which have resulted in the recovery of more than $147 million.

“Mortgage fraud ruins lives, destroys families and devastates whole communities, so attacking the problem from every possible direction is vital,” said Attorney General Holder. “We will use every tool available to investigate, prosecute and prevent mortgage fraud, and we will not rest until anyone preying on vulnerable American homeowners is brought to justice.”

In this District, Operation Stolen Dreams has resulted in enforcement or dispositive court proceedings against a total of 17 persons—five separate indictments charging a total of 11 persons were returned by Houston grand juries, four additional defendants previously indicted have pleaded guilty, and two others were sentenced to prison and ordered to pay a total of more than $4.1 million in restitution. All were allegedly involved in a variety of mortgage fraud schemes including loan origination, equity skimming, real estate investment and builder bailout schemes. The alleged roles of those charged and convicted include straw purchasers, loan processors, home builders, settlement attorneys, title company employees, real estate agents, loan officers, and straw purchaser recruiters. The amount of alleged fraud in these cases totals approximately $55 million.

“Owning your own home has always been the American dream,” said U.S. Attorney Moreno. “Mortgage fraud schemes have a chilling effect on financial institutions and the average citizen attempting to achieve that dream. The efforts by the Financial Fraud Enforcement Task Force nationally and in this district to identify, investigate and prosecute all those responsible for these schemes are significant steps toward restoring the dream.”

“Mortgage Fraud continues to pose a significant threat that hurts homeowners, businesses and our local economy,” said FBI Special Agent in Charge Powers. “The FBI and Houston Mortgage Fraud Task Force remain committed to our responsibility to aggressively investigate these criminal schemes and hold their perpetrators accountable.”

“These schemes adversely undermine our financial institutions; impacts the integrity of our tax system, drives buyers into foreclosures and leave our neighborhoods with deteriorating properties and property values, said IRS-CI Special Agent in Charge Clark.

“The U.S. Secret Service is proud to have participated in Operation Stolen Dreams, with our dedicated agents pursuing criminal investigations of mortgage fraud violations, which have culminated in the successful federal indictments of individuals in our district,” said USSS Special Agent in Charge Foley. “Cooperation and partnerships such as these consistently allow us to focus our resources to uncover and prevent criminal activity more efficiently than ever.”

“Cases investigated by HUD-OIG as part of the National Mortgage Fraud Working Group have successfully produced numerous criminal actions against multiple defendants and several arrests, both nationally and within the Southern District of Texas,” said Assistant Special Agent in Charge McKnight. “Inspector General Kenneth M. Donohue sees that special agents of our Houston, Fort Worth and San Antonio, Texas, and other sub-offices work in partnership with the United States Attorney’s Office and other agencies to ensuring scarce resources are not diverted to those who seek to get rich at the expense of those who so desperately need assistance today.”

The Chief of the Financial Crimes Division for the Harris County District Attorney’s Office, Kaylynn Williford added, “The Harris County District Attorney’s Office, Financial Crimes Division, and local law enforcement agencies, in conjunction with the FBI and the United States Attorney’s Office, have worked together to ensure that mortgage fraud and associated financial crimes are investigated and prosecuted to the fullest extent of the law. We hope that such prosecutions will act as a deterrent to those who seek to commit such crimes. Financial crimes, and mortgage fraud in particular, have a devastating effort on our economy. Unlike most criminal conduct that affects a small number of victims, mortgage fraud impacts the entire country. Together, we hope to eradicate the viral spread of mortgage fraud and other financial crimes in Harris County and the surrounding areas.”

The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit StopFraud.gov.

In addition to the FBI, IRS – CI, USSS, HUD and the Harris County District Attorney’s Office, the Financial Fraud Enforcement Task Force in the Southern District of Texas includes the U.S. Postal Inspection Service, Securities and Exchange Commission, the Federal Deposit Insurance Corporation – Office of Inspector General, Texas Attorney General’s Office, Texas Department of Savings and Mortgage Lending, Houston Police Department, Harris County Sheriff’s Office.

The Financial Fraud Enforcement Task Force Coordinator for the United States Attorney’s Office is Assistant U.S. Attorney James Buchanan, Deputy Chief of the Criminal Division Fraud Section. The cases announced today are being prosecuted by Assistant U.S. Attorneys Gregg Costa, Melissa Annis, Belinda Beek, and Jennifer Lowery.

An indictment is a formal accusation of criminal conduct, not evidence.

A defendant is presumed innocent unless convicted through due process of law.

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