Signaling that the U.S. Department of Justice is stepping up its investigation into mortgage fraud, the DOJ on Thursday afternoon said that Leib Pinter, 64, a former executive of Olympia Mortgage Corp., was sentenced today to 97 months in prison for orchestrating a scheme to defraud Fannie Mae (FNM) in connection with loans refinanced by Olympia but owned by the GSE. Pinter was also ordered to pay more than $43 million in restitution to the victims of his fraud scheme, according to Benton J. Campbell, the U.S. Attorney for the Eastern District of New York, whose office prosecuted the cae. Pinter had pled guity to the charges on Sept. 11, 2008. When Olympia refinanced a Fannie Mae mortgage loan, Fannie Mae typically wire transferred the money to an Olympia bank account. Olympia was then required to pay off the underlying mortgage loan by remitting the outstanding balance to Fannie Mae. Instead, Pinter misappropriated these proceeds for the benefit of Olympia. When the fraudulent scheme was revealed, Fannie Mae held nearly $44 million in unpaid principal in refinanced mortgage loans. “The defendant took advantage of his relationship with Fannie Mae to enrich himself and others,” said Campbell. “This case is yet another example of the Justice Department’s swift and vigorous response to those who have corrupted our nation’s lending practices.” The conviction comes after Campbell last year formed a task force comprised of federal, state and local law enforcement agents and investigators to address the burgeoning problem of mortgage fraud. Write to Paul Jackson at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.