Mortgage Loan Fraud Connections with Other Financial Crime: An Evaluation of Suspicious Activity Reports Filed by Money Services Business, Securities and Futures Firms, Insurance Companies and Casinos

• NCJ Number: 229055
• Date Published: March 2009
• Length: 32 pages
• Corporate Author: Financial Crimes Enforcement Network (FinCEN)
• Sale Source: Financial Crimes Enforcement Network (FinCEN)
• Publication Format: Document
• Publication Type: Report (Study/Research)
• Language: English
• Country: United States of America
• Note: Downloaded December 15, 2009

Annotation

In this study, the Financial Crimes Enforcement Network (FinCEN) identified subjects reported in depository institution Suspicious Activity Reports (SARs) for suspected mortgage loan fraud and evaluated activities of these "mortgage loan fraud" (MLF) subjects reported in depository financial institution SARs (SAR-DIs).

Abstract

Examining a 5 year period, from July 2003 through June 2008, the FinCEN identified approximately 156,000 MLF subjects reported by depository institutions in SAR-DIs. Approximately 2,360 of these MLF subjects were reported for suspicious activity in 3,680 of the other SAR types. Collectively, these reports provided information about ways in which the MLF subjects and associated subjects reportedly hid, moved, or disposed of large sums of cash. Highlights of additional findings includes: 1) suspicious activities of MLF subjects most often reported in the SAR types reviewed were money laundering and transactions apparently structured to avoid currency transaction reporting requirements; 2) approximately 70 percent of SAR-money services businesses (MSBs) described suspicious wire transfers by MLF subjects, and 34 percent described wire transfers by MLF subjects to foreign countries; 3) securities fraud was identified in 23 percent of SAR-securities frauds (SFs) reporting MLF subjects, compared to 16 percent of all SAR-SFs in the same 5 year period; and 4) professionals in real estate and financial industries frequently were reported as subjects in all of the SARs examined for this report. MLF involves intentional misrepresentations to a lender for the purpose of obtaining a loan that would otherwise not be advanced by the lender. Some mortgage loan fraud is reported through SARs required under the Bank Secrecy Act (BSA). This report offers an overview of SAR filings by non-depository institutions associated with MLF by virtue of their connection to subjects' names by depository institutions in SAR filings for suspected MLF. Figures and tables