Good afternoon. I am pleased to be joined today by Robert Mueller, Director of the FBI.
Today we are announcing the results of a nationwide law enforcement sweep aimed at investigating and prosecuting mortgage fraud. In three and a half months, this action, known as Operation Malicious Mortgage, has resulted in charges against more than 400 individual defendants. Yesterday alone, 60 people were arrested and face charges, and arrests are continuing today.
Mortgage fraud poses 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. It includes a wide variety of criminal acts that have proved devastating to many American families.
In a separate action today, an indictment was unsealed in the Eastern District of New York charging two Bear Stearns portfolio managers with conspiracy and fraud charges related to two hedge funds that invested in, among other things, securities tied to mortgage debt.
According to the indictment, the men committed fraud by making misrepresentations to the funds’ investors. Even though they knew that the funds were in danger of collapse because of the decline of the subprime mortgage market, they misled investors about the financial prospects of the funds by making misrepresentations about the amount of money other investors were withdrawing and about the extent of their personal investment in the funds.
Operation Malicious Mortgage and the Bear Stearns case demonstrate that the Department of Justice is determined to detect and punish mortgage fraud and to help restore stability and confidence in our housing and credit markets. The cases announced today represent the ongoing enforcement work of federal investigators and prosecutors across the country, working with the more than 40 task forces they and their state and local counterparts have formed to combat fraud and related abuses.
Operation Malicious Mortgage marks the third nationwide sweep that the Department has directed since 2004 against mortgage fraud and related crimes that have roiled our housing and credit markets. The integrity and credibility of these markets depend upon fair dealing. While the law cannot dictate economic outcomes, or protect individuals from bad investment decisions or unlucky breaks, it does protect them from fraud. Our investigation and prosecution of these crimes will continue as we work with other federal and state agencies to restore stability and confidence in our nation’s housing and credit markets.
I would also like to thank our partners in this operation and their representatives in the audience today, including Assistant Inspector General for Investigations at the FDIC Office of the Inspector General, Sara Gibson; Director of Operations for the IRS Criminal Investigation Division, Rick Raven; Deputy Assistant Director Matt Allen of the Office of Investigations at Immigration and Customs Enforcement; Assistant Inspector General for Investigations John McCarty from the U.S. Department of Housing and Urban Development; U.S. Trustee Program Director Clifford White; Inspector in Charge of Criminal Investigations at the U.S. Postal Inspection Service, Robert DeMuro; as well as our partners at U.S. Secret Service, and the Department of Veterans Affairs Office of the Inspector General.
This operation, and our ongoing efforts against mortgage fraud, work best as a cooperative effort across the federal government, and with our state and local counterparts. Our efforts depend upon the help of all of these organizations represented here today, and dozens more around the country.
Finally, although I trust this is stating what is self-evident to every American, all of the individuals charged in this operation, like anyone charged in America, is presumed innocent unless and until convicted. The Department and its partners welcome the chance to present our case to juries and judges, but those charged are presumed innocent in our legal system.
Now I'd like to turn the microphone over to Director Mueller, and then we will take any questions you have.
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