Schumer, Hynes Announce Kings County District Attorney's Office to Create New, Groundbreaking Real Estate Fraud Unit - Will Address the Recent Flood of Mortage Fraud Cases Plaguing New Yorkers

Press Release

SCHUMER, HYNES ANNOUNCE KINGS COUNTY DISTRICT ATTORNEY'S OFFICE TO CREATE NEW, GROUNDBREAKING REAL ESTATE FRAUD UNIT - WILL ADDRESS THE RECENT FLOOD OF MORTAGE FRAUD CASES PLAGUING NEW YORKERS

New Federal Funding for Brooklyn DA's Office Will Help Protect Brooklyn Homeowners From Mortgage Scams

Real Estate Fraud Unit Will Employ Twelve Officers Who Can Focus Exclusively On Real Estate Crimes That Plague the Borough

Schumer and Hynes: During the Economic Crisis, We Need All Hands on Deck to Protect NY'ers from Another Wave of Housing Scams

Today, United States Senator Charles E. Schumer and Kings County District Attorney Charles J. Hynes announced that the King's County District Attorney's Office will create a new Real Estate Fraud Unit using $875,000 in new funding included in the 2009 Omnibus Appropriations Act. The new unit will address the recent flood of mortgage fraud cases across Brooklyn that are plaguing homeowners in the borough. In the past several years, local politicians, homeowner advocacy groups, attorneys, state agencies, and homeowners have complained of having nowhere to turn to report mortgage and deed fraud. Officials receiving the complaints have also voiced frustration over having no office to report to that specifically investigates mortgage scams. The creation of the District Attorney's Real Estate Fraud Unit will resolve these issues by employing 12 staffers who will be able to focus exclusively on real estate crimes that plague the borough and prosecute scammers for their crimes.

"The Real Estate Fraud Unit is just what Brooklyn needs during the ongoing economic and housing crises," Schumer said. "New Yorkers have suffered for too long because of scam artists who feel they can take advantage of people without any repercussions. This fraud unit will help protect Brooklyn residents from these criminals and ensure that rather than walking away from their crimes, they are prosecuted to the fullest extent of the law."

"The recent foreclosure wave, following a spike in home values, created a crisis in the potential loss of homeownership and a perfect storm of factors for real estate scammers to capitalize on," said District Attorney Charles J. Hynes. "The new Real Estate Fraud Unit in my Rackets division will focus all its attention on prosecuting and hopefully, eliminating this insidious crime. I'd like to thank Senator Schumer for his efforts to secure the funding that made this dedicated prosecutorial unit possible."

Over the past several years, the Kings County District Attorney's Office has been flooded with referrals of mortgage and deed fraud cases from local politicians, homeowner advocacy groups, attorneys, state agencies, and individual homeowners. While several investigations and prosecutions have been undertaken, much of this increasing work load is referred elsewhere, making the system extremely unorganized and confusing. The Brooklyn DA's office often does not handle many of these cases due to lack of investigative and prosecutorial resources. Victims of mortgage fraud are generally referred to civil court to battle the scams because many groups believe this will allow victims to resolve their individual situations. Unfortunately, not enough headway has been made to combat the huge mortgage scam crisis taking over Brooklyn and New York City.

The majority of these cases involve some degree of criminal conduct, such as theft of a home through a forged deed, a foreclosure rescue scam where a victim unwittingly signs over ownership of the house, falsification of borrower assets by a mortgage broker, or falsification of an appraisal report in order to close a loan that the borrower cannot actually afford. But uncovering the evidence of criminality requires investigative resources that are currently not readily available to victims. And even though efforts have been made by other agencies to address this problem, not enough has been done. In 2007, the New York State Legislature enacted the Home Equity Theft Prevention Act that was meant to specifically eliminate foreclosure rescue scams. The Act provides for minimal criminal sanctions, but the DA's office has yet to find a case that fits the Act's parameters. In November 2008, the Legislature declared a new crime, residential mortgage fraud, considered a minor addition to the arsenal prosecutors already have. Previously existing criminal charges include grand larceny, falsification of business records, forgery, and along with many others.

Many other initiatives have been created recently in order to either prevent victimization or to provide funding for refinancing. While many of these efforts have been worthwhile, none provide for the criminal sanctions necessary to deter would-be criminals. Missing from these initiatives has been a dedicated prosecutorial unit. Increased prosecution of these frauds is a necessary weapon in the arsenal of government programs to end the crisis currently manifesting itself in the foreclosure wave. Prosecutions can result in jail sentences for the offenders and restitution for the victims. The Real Estate Fraud Unit in the Kings County DA's Office's Rackets Division is needed to address the problem.

The Unit will have a Unit Chief, four attorneys, five financial investigators, one detective investigator and one paralegal, who can all focus their attention exclusively on cases involving real estate crimes.

Source