The Justice Department and FBI have quietly acknowledged they grossly overstated the scope of a mortgage fraud crackdown, which the administration heralded with much fanfare a few weeks before last year's presidential election.
According to a memo circulated by the FBI and a correction posted online by the Justice Department, the number of defendants, the number of victims and the size of the losses are, in reality, a fraction of what officials claimed last October.
Attorney General Eric Holder and other law enforcement officials claimed in early October that the initiative charged 530 criminal defendants on behalf of 73,000 victims who suffered over $1 billion in losses. The so-called Distressed Homeowner Initiative, which targeted fraud schemes against distressed homeowners, was highlighted in a press release and press conference at the time.
Holder, talking to the cameras on Oct. 9, called it "a groundbreaking, year-long mortgage fraud enforcement effort."
The real numbers, it turns out, were far smaller. The feds now admit that the number of criminal defendants charged was more like 107, not 530. The number of victims was 17,185—still a large number, but roughtly one fourth the size of the original headcount. And the losses totaled $95 million—not $1 billion, as originally claimed.