(npr.com) “Our lenders tell us that figure is very much on the low end of the scale,” says Corey Carlyle, senior director of government affairs at the Mortgage Bankers Association. “I’ve seen figures as high as $4 billion, and again, that is just what it cost the industry in 2006.”
And while street gangs only account for a portion of that, the fact that they have moved to mortgage fraud as a money-spinning enterprise worries law enforcement officials. They say it is part of a larger trend: gangs searching for ways to launder drug-dealing and gun-selling dollars.
Chicagoland, the city and the surrounding Cook County area, has been one of the areas hardest hit by the intersection of gangs and mortgage fraud.
Consider the Black Disciples gang: Some of its members were involved in a case of mortgage fraud a couple of years ago. The price tag for that case alone: $70 million.
Jim Wagner, who previously investigated white-collar crime cases for the FBI, is now the president of the Chicago Crime Commission.
“We had information from the FBI about Vice Lords [another Chicago-area gang] that there was perhaps $80 million in fraudulent mortgage activity,” Wagner says. “So it has been a significant problem, at least in the greater Chicago metropolitan area, and I suspect it is occurring in other cities, as well.”
It is unclear exactly how gangs migrated from street crimes to white-collar ones. Law enforcement officials suspect that tougher gun laws and sentencing guidelines may have played a role in the shift. When street gang members were sentenced to serve time in federal institutions on gun charges, they got an unexpected new criminal education from the inmates incarcerated there.
“All of a sudden they were talking to and meeting with a different class of criminal, some who had participated in financial fraud themselves,” Wagner says. (more…)
Find current mortgage rates at www.saveonrefinance.com
#
