From the daily archives: Thursday, December 10, 2009

City of Holtville

December 4

It was reported that a male and female couple are having an intense and loud argument, though the matter was not known the caller is afraid that they may get physical, both subjects were counseled and separated, they were sent home.

It was reported, that the caller’s brick fence which is in the back of his home facing the alley was vandalized with graffiti using spray paint, the caller believes it happened sometime late in the evening, a report was taken.

December 5

It was reported, that a male subject is harassing people as they pass by, the subject refused to leave the area, but complied when an officer sent him on his way, the caller was advised to call back should this happen again, the male subject was advised to not return.

It was reported, that the caller found his windshield broken, the value of the windshield was estimated to cost $150.00, a full report was written up, the caller was advised to call back should he see anything suspicious in the area.

It was reported, that the caller’s neighbors are having a huge argument, the caller stated that there are two women and one male subject fighting and causing a noise disturbance, the subjects were contacted and asked to tone it down, they complied.

December 6

It was reported, that a male subject was seen taking off the screen to one of the windows of the residence, the caller did scare him away by turning on the light, the caller is worried that he is still in the complex, close patrol was kept in the area.

It was reported, that the caller’s ex-boyfriend is calling her and her friends, the male subject is shouting and yelling obscenities at them, the caller was advised on how to deal with the subject.

It was reported, that the caller’s vehicle was vandalized sometime last night, the caller stated that the passenger side tires were slashed open with a very sharp blade, a report was taken, the caller was advised on his options.

December 7

It was reported, that a 10 year old male kid was on a motorcycle driving around the sidewalk and the road, though his sister supervised him they were both advised and asked to put the motorcycle away, their parents were counseled.

It was reported, that an unknown small type of breed is in the area, the dog appears to be docile does have a collar around his neck, the owner was notified, the dog was retrieved.

December 8

It was reported, that a male subject is driving recklessly up and down the street, the subject was driving in a purple pickup truck, the subject was not caught, but the caller was advised to call back should he return.

It was reported from, that the caller is having problems with a female friend and a female subject who he doesn’t know, the threesome was counseled and sent home.

City of El Centro

December 4

It was reported that a few kids on skates were bothering customers, skating on rails and jumping in and out of the streets, though they refused to leave when asked, they did leave as soon as an officer asked them too, the kids were asked not to come back.
It was reported that the caller’s ex-boyfriend is at her home and she does not want him there, she then explained that she was at the neighbors, and is afraid of being hit, the situation was handled, she was advised to get a restraining order against her ex.
December 5

It was reported that a beer bottle was thrown at the caller’ vehicle’s windshield which shattered, the unknown subject fled the scene and was not caught; the caller was advised of her options.
It was reported that a bicycle was found in the caller’s front yard, a men’s green huffy mountain bike was found laying on her front yard, the bicycle was taken in to the lost and found section.
It was reported that the dogs in the neighborhood are barking and have been for about 20 minutes, the caller thinks that someone might have broken in somewhere and is causing the dogs to bark, it turned out that a subject was just found sleeping in the area, the man was asked to leave.
December 6

It was reported that the caller is hearing noises in the backyard, she is unsure to what it can be, she was asked to remain calm while an officer inspected the area, nothing or no one was found in her back yard.
It was reported that three kids at the age of 10 years old were shooting a few rounds with their paintball guns, the caller is bothered that a few shots have hit her home, the young kids were counseled, their parents advised.
December 7

It was reported that the caller has just gotten out of a physical fight with a subject in the backyard, the caller didn’t state what relation he or she may have had with the unknown subject, but it was stated that he refused to leave, the caller was not injured during this ordeal, the caller was advised to call back should he return.
It was reported that there’s an aggressive male subject in the area, the subject was acting irate and a little crazy, the subject was contacted and detained with no incident, no one was hurt during the males tantrum.
December 8

It was reported that the caller’s son has threatened the entire family, though the threats were not described, the caller did state that he is worried that he may act upon the threats, the caller was advised of his options.
It was reported that a fight had broken out between two female subjects, the physical confrontation took place behind a gas station in the area, both females left the area, neither seemed to be seriously injured.
It was reported that a brother and sister couple are having a big argument when contacted and asked why they argued, it turned out to be in reference to a dog they had, they were both counseled and advised of their options.

City of Brawley

December 4
It was reported that two Hispanic males are in the area, causing trouble, the subjects were then seen breaking windows, they were last seen running down the alley, and they were not found in the area.
It was reported; that pair of female and male couples seem to have gotten into a small brawl, no one seemed to be severely hurt, and the caller was advised to call back should they return for another round.
December 5

It was reported that the caller is hearing noises coming from the neighbors place, the only problem is that the neighbors aren’t home, when investigated a burglar had only walked away with a DVD player valued at $80 dollars.
It was reported that the caller believes his son is stealing miscellaneous items from his home or elsewhere and that he maybe smoking marijuana at times, the caller would like for him to be counseled, the young man was contacted.
It was reported that a male subject whom appeared to be 25 years old was around in the neighborhood looking into the caller’s windows, the caller believes it is her ex-husband, the caller was advised of her options.
December 6

It was reported that the caller’s parents are shoving and pushing themselves around, the caller whom is a young kid is worried that they may actually get hurt, the caller’s parents were under the influence, they were counseled.
It was reported that two unknown subjects were having an argument while loitering in the middle of the dirt road, the caller did not recognize the subject to be living in the residence, the two suspicious subjects were gone before an officer could arrive
It was reported that the caller can hear a few subjects screaming, rustling and running around close by, when an officer made a perimeter check around the area, no signs of violence could be found, the caller was advised on her options.
December 7

It was reported that the caller’s son is being very aggressive, though the caller does have a restraining order against him, he wishes to not enforce it, the caller just wants him gone, the young man was sent on his way.
It was reported that a male subject is inside the store is bothering customers by asking for hand-outs and getting a bit too personal, the subject is under the influence of alcohol, the subject was ultimately sent on his way by an officer.
December 8

It was reported that a subject is being violent, though he does not have a weapon, he is under the influence, when contacted it turned out to be that a father was merely disciplining his children the matter was resolved.
It was reported that two vehicles were racing each other in the arena, the two vehicles were running stop signs and being reckless, the caller is worried that they might get hurt or might hurt someone else, the two cars were not identified.

City of Calexico

December 4

It was reported that a couple were having an argument which seemed to disturb the peace around the area, when contacted, they were both counseled, the male half stated that he was waiting for a ride to stay in Calexico for the night.
It was reported that a large brown or tan colored pit bull is loose in the area, the dog is known for being ill tempered, the caller is concerned that someone might get hurt from it; the dog has not been captured.
December 5

It was reported that a few teenagers had broken into the pool and were having a nice swim, an officer caught up to the young trespassers and advised them that if they returned, they’d be cited, the young ones were sent home.
It was reported that a group of five or six subjects in the area loitering and snooping around, when contacted one of the subjects stated that they weren’t waiting for anyone nor did they know anyone in the complex, one of the subjects even knocked on the caller’s door, the group was gone before an officer arrived.
It was reported that the caller’s daughter is pushing, hitting and screaming at her, the caller is fed up, the reason for her daughter’s behavior is because the caller took away her daughter’s TV, phone and vehicle, the daughter was counseled.
December 6

It was reported that the caller can hear a subject arguing with a cashier, the caller then stated that he can hear the subject threatening and yelling at the caller, when contacted the subject stated that he was upset over the audio system that he bought.
It was reported that the caller’s 10 year old son is threatening to kill the caller, the caller did state that the young man goes berserk when he doesn’t get it his way he has been known for throwing items such as knives along with other dangerous items, the young man was counseled.
It was reported that a subject is knocking and trying to climb up to a window to enter the caller’s home, when questioned, the man turned out to be under the influence and believed he was at his own home, the situation was handled.
December 7

It was reported that a lifted Silverado is driving at a high rate of speed while being reckless, the caller then stated that the white Silverado had a blown tire, the vehicle was not found, the caller was advised to call back should he return.
It was reported that the caller’s co-worker has been harassing her for some time now, the caller stated that this had been an on-going issue for some time now and was advised on how to handle the situation.
December 8

It was reported that a male subject is in the area causing trouble, the subject was seen breaking windows, the male subject was not found, nor was a description available, the caller was advised to call back should he return.
It was reported that there was a group of teenagers sitting at the table by the restroom, seemed to get a little creative when they started spray painting the restroom walls, the group was not found in the area, the graffiti was noted and written up.


Imperial Valley Mall Reveals Santa’s List Of Most Requested Gifts

Tie-Gift-Box-Scratch worry off the holiday gift giving list this season. Santa is taking a load off parents and spouses by revealing his secret list of “must-have” gifts for 2009. While fun and functional electronics top the list again this year, gifts with a personal touch never go out of style. Whether you have a Super Mom, Active Retiree, Trendsetter or Adventurer on your list, there’s something for everyone at Imperial Valley Mall.
· Urban traveler – Whether a busy mom, techie teen or somewhere in between, gift givers can’t go wrong with compact and functional electronics. Mini laptops/Netbooks, Portable GPS Navigator Systems, multi-functional mobile phones and other customizable mini devices are both fun and functional. Gifts are available at Cellular Connection, Clear Talk and Sprint/Nextel.
·         Active Retiree – Think on-the-go gifts for today’s active retirees. Athletic apparel, travel cases for jewelry and other personal effects, and gardening accessories are great bets for this group. Travel cases available at Macy’s, JCPenney and Dillard’s. VIP Sports Wear and Unlimited Active Wear have a great selection of athletic apparel.
· The Adventurer – Handheld GPS trackers, camping gear and outdoor apparel, portable alarm clocks and travel guides top their list. Find these gifts at Sears.
· The Thinker – Consider gifts that last all year long for this group. The Kindle Wireless Reading Device, books, or crossword or Sudoku Day-by-Day desk calendars are a great fit. Try Clara’s Hallmark for these great gifts!
· The Guy’s Guy – Check out sports team hats and apparel, Blu-ray disc players, BBQ accessories, multi-tools for these men on your list. Dillard’s, JCPenney, Macy’s and Sears have a good selection of small electronics and gadgets for men. Lids is the best place for a hat for that favorite team!
·  The Super Mom – Select something personal for these special ladies. Consider day planners or electronic organizers, personalized jewelry, personalized family photo frames and manicure/pedicure gift certificates. Gifts for engraving are available at Things Remembered or try a little pampering with a gift certificate from Davi Nails, MasterCuts, Nail Crafters or Trade Secret.
· The Gearhead – A wide variety of multi-functional electronics are available for the techies who like to have the latest technology. The cell phone sized mini camcorders and sleek touchscreen MP3 players that stream podcasts and play HD video as well as they play music are the hot ticket. Check out fye for a variety of great electronic gift ideas.
· The Urban Sophisticate – Look for trendy accessories like stylish ties and evening clutches, or look at the hottest makeup colors and tools. Home décor and barware are what’s on tap for this group. Fashion Blessings and Petite Boutique have a great collection of accessories! Or find an evening clutch at Express. Paloma’s Interiors, Macy’s and Dillard’s are the stores to shop for home décor items.
·  The Gaming Guru – From Xbox to Wii, the game consoles get better every year and feature relatively inexpensive add-ons to keep the games challenging year after year. And don’t forget the portable ones like the Sony PSP to the Nintendo DS, and accessories like headphones. Available at Game Stop or check out fye for gently used games.
· The Domestic Diva – Stylish serving pieces, cookbooks and stands, candles and home accessories are hits with these special ladies. Go straight to Paloma’s Interiors for these easy to find gifts or check out the candles available at Bath & Body Works.


Statement Before the Senate Judiciary Committee

December 9, 2009

Good afternoon Mr. Chairman, Senator Sessions, Senator Kaufman, and distinguished members of the Committee. I want to thank you for the opportunity to testify before you today about the FBI’s ongoing efforts to combat significant financial crimes.

As we all know, financial fraud, to include mortgage, corporate, and securities fraud, were not the primary sources of the current financial crisis; collectively however, these frauds have significantly impacted the U.S. housing and financial markets.

Mortgage fraud continues to pose a significant threat to lenders, investors, residential real estate values, and the U.S. economy. The FBI delineates mortgage fraud into two distinct areas: 1) fraud for profit; and 2) fraud for housing. Fraud for profit generally employs schemes to remove equity, falsely inflate the value of the property, or issue loans relating to fictitious properties.  Many of the fraud for profit schemes rely on “industry insiders” who override lender controls. The FBI defines industry insiders as appraisers, accountants, attorneys, real estate brokers, mortgage underwriters and processors, settlement/title company employees, mortgage brokers, loan originators, and other mortgage professionals engaged in the mortgage industry.

Fraud for housing, on the other hand, represents illegal actions perpetrated by borrowers, typically with the assistance of real estate professionals. The simple motive behind this fraud is to acquire and maintain ownership of a residence under false pretenses. This type of fraud is typified by a borrower who makes misrepresentations regarding the income or employment history to qualify for a loan, which the borrower would otherwise not qualify for. Although generally not as sophisticated as fraud for profit schemes, fraud for housing has played a large role in the decline of residential real estate values since unqualified buyers defaulted on loans they would otherwise not have obtained but for their fraud.

The FBI compiles data on mortgage fraud through suspicious activity reports  filed by financial institutions through the Financial Crimes Enforcement Network (FinCEN), and through reports generated by the Department of Housing and Urban Development (HUD) Office of Inspector General (OIG). The FBI also receives and shares information pertaining to mortgage fraud through its national and regional working groups, as well as complaints from the industry at large.

Mortgage fraud, however, is just one component of the recent financial crisis, which has left trillions of dollars of losses in its wake as the Dow Jones Industrial Average fell to 6,547 in March 2009 from its high of 14,164 in October 2007. Throughout the past decade, a flourishing market developed for the securitization and sale of assets such as mortgages by financial institutions and other entities who were seeking to alleviate risk, increase cash flows, and profit from these complex financial products. As underwriting requirements began to erode, sub-prime assets began to make up the majority of asset backed securities. In 2007, the markets for sub-prime asset backed securities began to collapse, which has been credited as one of the primary causes of the financial meltdown. In the wake of this historic economic calamity, the FBI has and will continue to investigate criminal allegations related to the activity that contributed to the financial crisis using all available tools at our disposal.

Since the financial meltdown in the fall of 2007, the FBI has effectively combated significant financial frauds on various fronts. For example, we have more than 2,100 pending corporate and securities fraud investigations across the country, many with losses exceeding $100 million, and several with losses over $1 billion. The FBI has prioritized its efforts to combat the most egregious corporate and securities fraud offenders, which resulted in 460 convictions in fiscal year (FY) 2009.

Financial Fraud Trends

It is no secret that the financial crisis caused severe damage to both the financial markets and investor confidence. The crisis not only revealed new fraud schemes, such as material misrepresentations in the marketing of asset backed securities, but also exposed established fraud schemes which had been thriving in the global financial system, such as Ponzi schemes.  These schemes, both old and new, highlight the need for law enforcement and regulatory agencies to be ever vigilant, and work closer together, to identify financial fraud both in boom and bust years.

Securities Fraud—High Yield Investment Fraud/Ponzi Schemes

High yield investment fraud schemes have many variations, all of which are characterized by offers of low risk investments, guaranteeing an unusually high rate of return. Victims are enticed by the prospect of easy money and a fast turnaround.

The most common form of these frauds is the Ponzi scheme, which is named after early 20th century criminal Charles Ponzi. These schemes use money collected from new victims, rather than profits from an underlying business venture, to pay the high rates of return promised to earlier investors. This arrangement gives investors the impression there is a legitimate, money-making enterprise behind the fraudster’s story; but in reality, unwitting investors are the only source of funding.

Another type of high yield investment fraud is prime bank investment fraud. In these schemes, victims are told that certain financial instruments such as notes, letters of credit, debentures, or guarantees have been issued by well-known institutions such as the World Bank, and offer a risk-free opportunity with high rates of return. Perpetrators often claim unusually high rates of return and low risk are the result of a worldwide secret exchange open only to the world’s largest financial institutions. Victims are often drawn into prime bank investment frauds because the criminals use sophisticated terms, legal looking documents, and claim that the investments are insured against loss.

As the financial crisis expanded, drying up investment funds and causing investors to begin seeking returns of their principal, investment fraud schemes began to unravel. In FY 2009, the FBI realized a 105 percent increase in new high yield investment fraud investigations when compared to FY 2008 (314 as opposed to 154), many with losses exceeding $100 million. Many of the Ponzi scheme investigations have an international nexus and have affected thousands of victims. The most significant of these, the $64 billion Ponzi scheme perpetrated by Bernard L. Madoff, resulted in the longest prison sentence in the history of financial crime—150 years.  Similarly, both, Robert Allen Stanford of Houston, Texas, and Thomas Petters of Minneapolis, Minnesota, have been charged in alleged billion-dollar Ponzi schemes. Petters was recently found guilty by a jury in Minnesota of 20 counts of fraud and other federal offenses. The FBI continues to aggressively investigate this criminal threat, and currently has more than 1,500 related securities fraud investigations.

Insider Trading

The FBI proactively investigates insider trading schemes, using all available tools to remove the most egregious offenders from the financial markets. A recent highlighted success came with the indictments and subsequent arrests related to allegations of insider trading within Galleon Group, a prominent hedge fund located in New York City. To date, 14 individuals have been arrested and the investigation is ongoing. The FBI continues to work closely with the U.S. Securities and Exchange Commission (SEC) on such matters, in a parallel law enforcement and regulatory effort to ensure fairly operated financial markets. Lack of regulatory oversight and transparency in the hedge fund industry makes this industry susceptible to various types of securities fraud and insider trading, and creates challenges to law enforcement. In addition, fraud committed by hedge funds poses a serious threat of substantial losses due to the fact hedge funds are typically highly leveraged.

Corporate Fraud

As the lead law enforcement agency investigating corporate fraud, the FBI has focused its efforts on cases which involve accounting schemes, self-dealing by corporate executives, and obstruction of justice. The majority of corporate fraud cases pursued by the FBI involve accounting schemes designed to deceive investors, auditors, and analysts about the true financial condition of a corporation. Through the manipulation of financial data, the share price of a corporation’s stock remains artificially inflated based on fictitious performance indicators provided to the investing public. In addition to significant financial losses to investors, corporate fraud has the potential to cause immeasurable damage to the U.S. economy and investor confidence.

The FBI has observed a rise in corporate fraud schemes and trends, such as the failures of prominent financial institutions partly caused by the recent collapse of the Sub-Prime market, the falsification of accounting records to obtain government funding through the $700 billion Troubled Asset Relief Program (TARP), and misrepresentations regarding the risks and valuations of complex financial instruments (e.g., credit default swaps and mortgage backed securities). Over the last five years, corporate fraud investigations have increased by 78 percent to more than 590 open investigations.

Numerous corrupt executives and accounting fraud schemes have also been exposed as more companies experience liquidity and cash flow problems, as evident in recent investigations to include the deferred prosecution agreement obtained against Beazer Homes and the recent trial of Thomas Petters. As a result of economic difficulties facing many U.S. corporations, it is anticipated that some companies will continue to commit various accounting frauds in an effort to hide their true financial condition from the public until the economic crisis has ceased.

Securities Fraud—Market Manipulation

Market manipulation, or “pump-and-dump,” schemes are based on the manipulation of lower-volume stocks purchased on small over-the-counter markets. The basic goal of market manipulation fraud is to artificially inflate (pump) the price of penny stocks so the conspirators can sell (dump) their shares at a large profit. The “pump” involves recruiting unwitting investors through false or deceptive sales practices, public information, or corporate filings. Many of these schemes use “boiler room” methods where brokers, who are bribed by the conspirators, use high pressure sales tactics to increase the number of investors and, therefore, raise the price of the stock. Once the price of the targeted shares reaches a certain point, the perpetrators “dump” their shares at a huge profit and leave innocent investors with significant losses. These schemes generate an estimated $6 billion in losses each year, and have the ability to significantly impact investor confidence.

One recent trend seen in market manipulation cases involves computer intrusion. Computer intrusion for the purpose of market manipulation often includes a criminal hacking into victims’ personal online brokerage accounts and using the accounts to purchase shares of a penny stock to inflate its price. As in normal pump-and-dump schemes, once the price of the stock reaches a certain point, the perpetrators dump their own shares and walk away with a large profit.

The FBI employs a number of proactive techniques to target market manipulation perpetrators and currently has 109 such cases. In FY 2009, 62 individuals were charged in market manipulation schemes following FBI investigations.

Foreclosure Rescue Scams

Foreclosure rescue scams are particularly egregious because fraudsters take advantage and illegally profit from the misfortune of others. As foreclosures continue to rise across the country, so have the number of foreclosure rescue scams targeting unsuspecting victims. These scams include victims losing home equity or paying thousands of dollars in fees in exchange for little or no service. In many of these cases, victims ultimately lose their home to foreclosure. The FBI is again working with our law enforcement, regulatory, and industry partners to target, disrupt, and dismantle the individuals and/or companies engaging in these fraud schemes.

Proactive Approach to Financial Fraud

In addition to tripling the number of FBI special agents who investigate mortgage fraud cases in the field, the FBI has implemented a number of innovative and proactive methods to detect and combat mortgage fraud and other significant financial frauds. Foremost is the development of the Financial Intelligence Center (FIC). The FIC was established on September 14, 2009 with resources appropriated by Congress, through H.R. 2346, Supplemental Appropriations Act, to the FBI to investigate mortgage fraud, predatory lending, market manipulation, and other financial frauds. The FIC is currently staffed with one supervisory intelligence analyst, eight staff operations specialists, and six intelligence analysts. In FY 2010, the FIC should be fully operational with a total staffing level of 58. The FIC’s mission is to provide tactical analysis of intelligence data, data sets, and databases by using evolving technology and data exploitation techniques to create targeting packages to identify the most egregious criminal offenders and to enhance current criminal investigations. In addition, the FIC responds to requests by FBI field offices to complement the field’s resources to identify emerging economic threats. The FIC also provides training to the field to assist with identifying the most egregious criminal enterprises.

The Department of Justice’s Criminal Division is initiating a mortgage fraud initiative that will utilize, among other tools, the FIC’s analysis in the prosecution of its cases.

Another proactive approach was the development of an analytical computer application to identify property flipping transactions, first developed by the FBI’s Washington Field Office, to effectively identify property flipping in the Baltimore and Washington areas. The original concept has evolved into a national FBI initiative, which employs statistical correlations and other advanced computer technology, to search for companies and persons demonstrating patterns of alleged illegal property flipping. As potential targets are analyzed and flagged, the information is provided to the respective FBI field office for further assessment. Illegal property flipping is described as purchasing properties and artificially inflating their values through false appraisals. The artificially valued properties are then sold to an associate of the “flipper” at a substantially inflated price. Quite often the property is “flipped” within 30 days, but sometimes the “flip” occurs on the same day as the original purchase. Typically, illegally flipped properties go into foreclosure and are ultimately repurchased for a fraction of their original value.

Other methods employed by the FBI include sophisticated investigative techniques such as undercover operations. These investigative measures not only result in the collection of valuable evidence, but also provide an opportunity to apprehend criminals in the commission of their crimes, thus reducing losses to individuals and financial institutions.

In December, 2008, the FBI dedicated resources to create the National Mortgage Fraud Team (NMFT), at FBI Headquarters in Washington, D.C. The NMFT, which has responsibility for management of the FBI’s Mortgage Fraud Program, serves as a veritable fusion center. Through program guidance, oversight, training, and information sharing, the NMFT provides the tools necessary to identify the most egregious mortgage fraud perpetrators, prioritize pending investigations, and ensure that mortgage fraud efforts are both threat-based and intelligence driven.


Some of the best tools in the FBI’s arsenal for combating financial frauds are its long-standing partnerships with federal, state, and local law enforcement and regulatory agencies. Collaboration, communication, and information-sharing have long been a proven solution to the nation’s most complex crimes. In response to a growing gang problem, for example, the FBI stood up Safe Streets Task Forces across the country. In response to crimes in Indian Country, the FBI developed the Safe Trails Task Force Program. In response to the recent wave of financial crimes, the FBI stood up Mortgage Fraud Task Forces across the country. Currently, there are 16 Mortgage Fraud Task Forces and 61 working groups nationwide. With representatives from federal, state, and local law enforcement, these task forces are strategically placed in areas identified as high-threat areas for mortgage fraud. Partners are varied, but typically include representatives of HUD-OIG, the U.S. Postal Inspection Service, the Internal Revenue Service – Criminal Investigative Division, FinCEN, the Federal Deposit Insurance Corporation (FDIC), and the U.S. Secret Service, as well as state and local law enforcement offices

This multi-agency task force model serves as a force-multiplier, providing an array of resources to adequately identify the sources of the fraud; allowing agencies to share investigative expertise; and increasing jurisdictional avenues, allowing task force members to find the most effective way to prosecute each case, particularly in active markets where fraud is widespread. We are pleased to report that model is working.

In October, 2009, for example, the FBI coordinated closely with our federal, state, and local law enforcement partners in “Operation Bad Deeds”—a massive multi-agency takedown of mortgage fraud schemes in New York state. In all, 41 defendants were charged with fraudulently obtaining $64 million in residential mortgages on more than 100 properties. Among those charged were six lawyers, seven loan officers, three mortgage brokers, one accountant, and a residential property appraiser.

A mortgage fraud surge was initiated in January 2009 in the Middle District of Florida, and was completed on October 31, 2009. The surge resulted in charges being filed against more than 100 persons, involved allegations concerning more than $400 million in mortgage loans procured by fraud, and included more than 700 properties. Participating in the surge were FBI Jacksonville, FBI Tampa, as well as several other state and federal law enforcement agencies.

In addition to our efforts to create Mortgage Fraud Task Forces across the country, the FBI participates on both the national Mortgage Fraud Working Group (MFWG), and the national Bank Fraud Working Group (BFWG). The MFWG and BFWG, chaired by the DOJ Fraud Section, represent a collaborative effort of multiple federal agencies and facilitate the information sharing process across agencies, as well as private organizations. Working in partnerships, the FBI is building on existing FBI intelligence databases to identify industry insiders and egregious criminal enterprises conducting systemic mortgage fraud.

In order to most effectively combat the threats of corporate and securities fraud, the FBI has partnered with numerous external agencies to form 37 corporate fraud and/or securities fraud working groups across the country. These working groups, such as the D.C. Metro Corporate Fraud Working Group, enhance cooperation and information sharing and provide a venue where the FBI can meet with our partners, e.g. SEC, to discuss current trends, threats, and the progress of selected ongoing investigations. In addition, the FBI works closely with the Special Inspector General for the TARP (SIG-TARP) to guard against fraud in the $700 billion TARP. The FBI is currently conducting several joint investigations with the SIG-TARP. Further, the FBI participates on the Term Asset-Backed Securities Loan Facility (TALF) Task Force. The TALF is a Federal Reserve program through which the Federal Reserve Bank of New York makes loans, which are secured by collateral in the form of asset-backed securities. These loans are typically made to hedge funds and other investment groups, and are vulnerable to fraud.

The FBI is a member of the newly formed Financial Fraud Enforcement Task Force (FFETF) recently announced by Attorney General Holder, which replaced the President’s Corporate Fraud Task Force. The new task force is comprised of more than 20 agencies, including the SEC, the Commodities Futures Trading Commission, the Department of Treasury, the FDIC, and HUD. The purpose of the Financial Fraud Enforcement Task Force is to maximize intelligence sharing between member agencies and to ensure that significant financial crimes related to the financial crisis and economic recovery efforts are appropriately addressed.

The FBI also participates in the Securities and Commodities Fraud Working Group, a national interagency coordinating body established by the DOJ Fraud Section to provide a forum for exchanging information, discussing violation trends, legal developments, law enforcement issues, and investigative techniques. In addition, FBI corporate fraud and securities fraud program managers frequently meet with their counterparts at the SEC’s home office in Washington, D.C. to discuss threats, emerging trends, pending investigations, and to share intelligence.

Industry Liaison

In addition to its partners in law enforcement and regulatory areas, the FBI continues to foster relationships with representatives of the mortgage industry to promote mortgage fraud awareness. The FBI has spoken at and participated in various mortgage industry conferences and seminars, including those sponsored by the Mortgage Bankers Association (MBA), the American Bankers Association, and the BITS Financial Services Roundtable (a consortium of financial institutions).

To raise awareness of this issue and provide easy accessibility to investigative personnel, the FBI has provided contact information of the FBI’s mortgage fraud supervisors to relevant groups, to include the MBA, Mortgage Asset Research Institute, Fannie Mae, Freddie Mac, and others.

Lenders are painfully aware how fraud affects their bottom line. Through routine interaction with FBI personnel, industry representatives are aware of our commitment to address this crime problem. The FBI frequently participates in industry sponsored fraud deterrence seminars, conferences, and meetings, which include topics such as quality control and industry best practices to detect, deter, and prevent mortgage fraud. These meetings play a significant role in training and educating industry professionals. Companies share current and common fraud trends, loan underwriting weaknesses, and best practices for fraud avoidance. These meetings also increase the interaction between industry and FBI personnel.

Additionally, the FBI continues to train its personnel and conduct joint training with HUD-OIG and industry on mortgage fraud. As a training model, the FBI seeks industry experts to assist in its internal training programs. For example, industry has assisted training FBI personnel on mortgage industry practices, documentation, and industry views of laws and regulations. Industry partners have offered to assist the FBI in developing advanced mortgage fraud investigative training material and fraud detection tools.

Likewise, the FBI makes considerable investment in industry liaison for our corporate fraud and securities fraud programs. We not only bring in industry experts to train FBI personnel, such as the Financial Industry Regulatory Authority, but FBI personnel also frequently attend meetings and conferences set up by such industries as part of our effort to foster relationships and proactively gather information.


Mr. Chairman, the FBI remains committed to its responsibility to aggressively investigate significant financial crimes. We will continue to work with the Office of Management and Budget and the Congress to ensure that adequate resources are available to address these threats. To maximize our current resources, we are relying on intelligence collection and analysis to identify emerging trends and egregious offenders to ensure we target the greatest threats. We also will continue to rely heavily on the strong relationships we have with both our law enforcement and regulatory agency partners.

The FBI looks forward to working with you and other members of this committee in solving this serious threat to our nation’s economy. Thank you for allowing me the opportunity to testify before you today.


Holtville Chamber Of Commerce To Host ‘Christmas In
The Park’ Dec. 17th

DSC_2030The Holtville Chamber of Commerce will host its annual Christmas in the Park Thursday, Dec. 17th.
It will take place from 6 p.m. to 8 p.m. and will be highlighted by a visit from Santa Claus.
Santa will arrive by firetruck at approximately 6:30 p.m. and set up shop on the steps of City Hall, if he follows the tradition of past visits.
In addition, the Holtville High School Band and Chorus will stage their Christmas concert  in the gazebo with songs of Holiday cheer and others fitting to the season.
Other activities include prize giveaways throughout the evening with drawings taking place every half hour or less. Gifts have been donated by local merchants.
Details on other party plans were not complete before we printed the paper. But you can come and find out for yourself Thursday evening.
Everyone from the community is invited to attend this annual event.


Supervisors Continue Rule 310 Fee Plan Despite Fuentes Objections

By Mario Conde
After a lengthy discussion by the County Board of Supervisors, the board approved the continuance of the 50% reduction in Rule 310 Operational Development Fees.
In an item brought up by Air Pollution Control Manager, Brad Poiriez, said that Imperial County has been designated as “Serious” for dust contamination. The adoption of the Operation Development Fees in 2007 was to provide a means to attain health-based ambient air quality and to protect the residents of Imperial County from harmful effects of poor air quality in the future.
Poiriez said that this will allow the Air Pollution Control District to maintain a program that ensures that acceptable levels of emission reductions are met and mitigations are enforced. The continuance of Rule 310 is also requested because of the current economic crisis in the Imperial Valley the housing and commercial development markets have decrease substantially. As a result,Poiriez, said, there is a lessening need for some mitigation measures to be implemented immediately. The Air Pollution Control District considers mitigation of air quality impacts both new and in the future to be the utmost importance and therefore recommends that nay reduction in the fee be on a temporary basis.
Supervisor Louis Fuentes said that people from the private sector approached him and said to be concerned with this 50% reduction and said that in order to grab more investments to the County, they need to have attractive benefits.
Fuentes made a motion to change the language of the ordinance by changing it to 75% and extend the 310 Rule until 2011. County Counsel Michael Rood suggested staff put more input since there would be legal ramifications and could be challenged in a court of law buy other outside agencies. Supervisor Gary Wyatt said that by voting to reducing it 75% would cripple the 310 rule that was considered and built after a long consideration from the County Board for many years.
Supervisor Mike Kelley asked County Counsel why there would be lawsuit if the ordinance is changed. Rood said that there would be various legal issues could be raised and could be uphold in court.
County Planning Director Jurg Hueberger asked the council to think about the action they are about to take because if they changed the rules of the game right now they would have to return several EIR’s that are about to be finished so they can do it again.
“I would hate to return it to the applicant when we are almost finished. We can’t change the rules right now. You could jeopardize some projects if you do so.” The planning director said.
Fuentes argued that the rules of the economy have changed and they need to change as well to bring new investment to the County. He said he is willing to take the private sector and start a dialogue between them and County Staff. Fuentes said that there needs to be a balanced fee for builders that make a commercial subdivision or a large warehouse. He amended his motion to keep the 75% and keep it for 2010 only. The board voted against Fuentes’ request 3-2 having only Fuentes and Kelley voting in Favor.
Supervisor Wyatt asked Poiriez when is this 310 rule going to expire. He said the ordinance will expired February 3, 2010. After some deliberation, the board of Supervisors voted 5-0 to approve the original ordinance until June 30, 2010 and gave direction to staff to hire a consultant as a third party.

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