OPINION

400 Charged in 'Malicious Mortgage' Fraud Scheme

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The Department of Justice and the Federal Bureau of Investigation charged more than 400 defendants in a nationwide fraud scheme coined “Malicious Mortgage” Thursday.

Two of those indicted included Ralph Cioffi and Matthew Tanin, former senior managers of the now bankrupt Bear Stearns hedge funds. Their indictment estimates they misrepresented the worth of their hedge funds resulting in a $1.4 billion loss to Bear Stearns investors.

Operation Malicious Mortgage found 144 mortgage fraud cases and have charged 406 defendants as a result of those cases.

"Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation’s housing market and to the peace of mind of millions of American homeowners," said Deputy Attorney General Mark R. Filip in a statement released from the Department of Justice. "Operation Malicious Mortgage and our other mortgage-related enforcement actions demonstrate the Justice Department’s commitment and determination to combat these criminal schemes, hold their perpetrators accountable and help restore stability and confidence in our housing and credit markets."

"Operation Malicious Mortgage is a concerted, joint law enforcement and prosecutorial effort aimed at disrupting individuals and groups engaged in mortgage fraud," said FBI Director Robert S. Mueller, III. "This operation is an example of our unified commitment to address this significant crime problem. The FBI will continue to direct investigative and analytic resources towards mortgage fraud and corporate securities fraud that threaten our nation’s economy."

The FBI sting began in March 1 and wrapped on June 18th. Charges have been brought in more than 50 different judicial districts.