Contact: Jessica Smith, (202)228-5185
Tuesday, April 28, 2009 Kimberly Hunter, (202)228-5258
WEBB SUPPORTS MEASURE TO CRACK DOWN ON MORTGAGE AND CORPORATE FRAUD
Bill Provides Staff and Resources to Uncover and Prosecute Fraud
Senator Jim Webb (D-VA) today supported the Senate passage of S.386, the Fraud Enforcement and Recovery Act of 2009 (FERA), to rebuild and strengthen the government’s ability to investigate and prosecute increasing instances of mortgage and corporate fraud.
“This legislation will help agencies root out the mortgage and corporate-related waste, fraud and abuse that contributed to our current economic climate,” said Senator Webb. “This initiative could yield returns of $15-20 for every $1 invested in increasing the availability of resources and staff to track down false claims.
“We have seen the rate of alleged fraud skyrocket to more than 65,000 reported cases in 2008 compared to just 4,700 in 2001 yet we have fewer investigators than we did during the 1980’s savings and loan crisis,” continued Webb. “We must aggressively monitor mortgage and corporate financial industry practices.”
Specifically, FERA would authorize $245 million per year in Fiscal Years 2010 and 2011 to hire hundreds of additional prosecutors, agents, and staff at the Department of Justice, the FBI, the US Postal Inspection Service, the US Secret Service, and the Office of Inspector General for the Housing and Urban Development Department to conduct investigations and prosecutions of financial fraud.
The bill would also improve and modernize fraud and money laundering statutes to strengthen prosecutors’ ability to combat fraud. This includes updating the definition of “financial institution” in federal fraud statutes to include mortgage lending businesses that are not directly regulated or insured by the federal government. These businesses account for nearly half of residential mortgages.
