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SIGTARP tackles fraud against homeowners, TARP banks

Quarterly report runs down enforcement efforts

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KEYWORDS SIGTARP
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The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) will be issuing its quarterly report to Congress Wednesday, and highlights include efforts to put an end to rescue fraud and efforts to ensure accountability.

SIGTARP is the lead law enforcement agency investigating rescue fraud and serves as the co-chair of the Rescue Fraud Working Group of the President’s Financial Fraud Enforcement Task Force (“FFETF”). Congress created SIGTARP specifically to investigate those who criminally abuse or commit fraud related to Americans’ unprecedented TARP investment in our financial system.

"SIGTARP is stopping crimes related to the unprecedented taxpayer bailout known as TARP and pursuing justice," said Christy Romero, Special Inspector General for TARP (SIGTARP). "Treasury’s status in recovering TARP funds has no bearing on SIGTARP enforcing the law because a company’s repayment of TARP must not serve as a shield to criminal liability."

As of December 31, 2013, SIGTARP’s investigations have resulted in criminal charges against 174 defendants (112 of whom were senior officers). Already 122 of these have been convicted, with others awaiting trial, and although not all of these have faced sentencing, 72 have been sentenced to prison to date. Thirty-seven of these defendants were sentenced to prison in 2013, compared with 13 defendants sentenced to prison in 2012.

SIGTARP says the importance of prison sentences resulting from a SIGTARP investigation is twofold: They bring justice, and the prospect of prison serves as a deterrent to future crime. 

"SIGTARP will aggressively investigate and work with its partners to prosecute these rescue fraud crimes. Additionally, homeowners who have contacted our crime tip hotline have voiced their struggles with mortgage servicers to gain access to TARP’s housing programs," Romero said. "These grievances evidence that Treasury can do more to ensure that TARP is not just a bailout of the banks and largest companies."

With more than 150 open investigations including large ones like Bank of America/Countrywide Financial, Bank of the Commonwealth, and American Mortgage Specialists, SIGTARP continues to open new investigations of ongoing suspected rescue fraud and to detect other rescue fraud by or against TARP institutions that had been hidden.

"While our economy is rebounding and Treasury continues to recover TARP funds, full economic recovery for our financial system and for TARP requires SIGTARP to maintain continued vigilance in combating rescue fraud. We stand committed to that fight," a SIGTARP spokesperson said.

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