HUD, SEC Partner in Mortgage, Securities Fraud Task Force
The Department of Justice (DOJ) is heading up a new, inter-agency task force to enforce investigation of financial fraud and financial crime. The US Department of Housing and Urban Development (HUD), the US Treasury Department and the Securities and Exchange Commission (SEC) will join the DOJ's efforts by serving on a "steering committee." The task force will cooperate with state and local partners to investigate financial crimes and prosecute the perpetrators of crimes in the financial markets. The task force, established by an Executive Order given by President Barack Obama, replaces another task force set up in 2002. It aims to combat mortgage, securities and corporate fraud, according to a HUD statement. "It's not enough to prosecute fraud only after it's become widespread," said Treasury secretary Tim Geithner. "We can't wait for problems to peak before we respond." Geithner added: "We're seeking comprehensive financial reform to create a more stable, safer financial system and stepping up our enforcement strategy. Doing so will help to stop emerging trends in financial fraud before they're able to cause extensive, system-wide damage to our economy." The task force is composed of senior-level officials from a variety of departments and federal agencies, including the Treasury, SEC, DOJ, HUD and the departments of Commerce, Labor, Education and Homeland Security. The Commodity Futures Trading Commission (CFTC), the Federal Trade Commission (FTC) and the Federal Deposit Insurance Corp. (FDIC) also have officials on the task force -- as do the Board of Governors of the Federal Reserve System, the Federal Housing Finance Agency (FHFA), the Office of Thrift Supervision (OTS) and Office of the Comptroller of the Currency (OCC), among others. The crackdown on mortgage and other financial fraud has been expected for weeks, as HousingWire first reported in early October the chief of Housing and Civil Enforcement Section, Civil Rights Division at the DOJ, Steven Rosenbaum, hinted that his agency would begin ratcheting up compliance investigations in the short term. Another source confirmed to HousingWire at that time that the DoJ was recruiting around 50 civil rights attorneys in order to begin the offensive. Write to Diana Golobay.