New FBI Targets: Real Estate Brokers
Updated: Dozens of real estate agents and brokers have reportedly been arrested by the FBI over the past few days, and more than 400 individuals have been swept up as part of a national crackdown on mortgage fraud.
Up to 70 have been arrested in Chicago alone, starting yesterday, and charges against them are expected to be announced early this afternoon, reports the Chicago Tribune.
Meanwhile, CNN says at least 300 arrests are involved. Although some date back as far as March 1, the news agency says most occurred during the past few days. The real estate agents and brokers being arrested are thought to be suspected of involvement primarily in small-scale schemes. More details will be provided later today at a press conference in Washington, D.C.
But the sweep also has netted the first executives in the nation to face charges for mortgage fraud, according to the Associated Press. The suspects are two Bear Stearns managers accused of misleading investors about the risks involved in a hedge fund that relied heavily on subprime mortgages. Arrested today, they are expected to be arraigned soon in federal court in Brooklyn on conspiracy and fraud charges.
Other major metropolitan areas in which arrests also apparently are being made include Atlanta, Miami and suburban Maryland, the Associated Press reported in a separate story.
Since this post was written, more information has been provided by federal officials. It is discussed in this ABAJournal.com post.
Related coverage:
Fortune: “Crime and delusion on Wall Street”
Wall Street Journal Law Blog: “The Indictment in the Bear Stearns Fund Manager Case”
CBS 11 News: “11 Indicted In Dallas For Mortgage Fraud Scheme”
ABAJournal.com: “Criminal Cases Against Mortgage Leaders Unlikely, Despite Subprime Crisis”
Updated at 4:10 p.m., central time, to conform with and link to subsequent ABAJournal.com post.
