Heinrich Cracks Down on Mortgage and Financial Institution Fraud

Fraud Enforcement and Recovery Act Passes Congress; Heads to Presidents Desk

Today, U.S. Representative Martin Heinrich voted for S. 386, the Fraud Enforcement and Recovery Act of 2009, which strengthens and expands the federal government's ability to effectively crack down on mortgage and financial institution fraud that have contributed to the recent economic collapse. This bipartisan legislation has now passed both the U.S. House of Representatives and the U.S. Senate.

"Rebuilding our economy and scrubbing it clean of fraud and injustice will put fairness back on the side of New Mexico consumers," said Rep. Heinrich. "This legislation ensures the integrity of financial transactions by closing the enforcement gap to combat mortgage fraud and related crimes."

The measure strengthens existing federal fraud and money-laundering provisions, gives the U.S. Department of Justice more tools to fight fraud in the use of TARP and Recovery Act funds, updates the definition of "financial institution" in federal fraud statutes to include mortgage businesses, and amends the False Claims Act to ensure that taxpayer money lost to fraud, waste, or abuse can be recovered.

Established in the legislation is an independent, bipartisan commission to investigate the causes of the current financial and economic crisis in the United States - similar to the investigation of the Pecora congressional committee that examined the Stock Market Crash of 1929. The Pecora investigation uncovered fraudulent and unscrupulous practices on Wall Street that undermined the financial system. That congressional investigation contributed to the development of the regulatory system that governed our financial markets for decades.

"A clear-eyed examination of what went wrong over these last few years is essential for a stronger economy tomorrow," said Rep. Heinrich. "Holding corporate and mortgage institutions accountable will help Americans begin to restore trust in our economy."

The Fraud Enforcement and Recovery Act authorizes the necessary resources to investigate and prosecute corporate fraud and stop mortgage scams. The legislation authorizes:

* $75 million for the FBI to nearly double the size of its mortgage and financial fraud program by hiring 190 additional special agents and more than 200 professional staff and forensic analysts;
* $50 million per year to U.S. Attorney's Offices to staff the FBI's fraud strike forces, and provides $40 million to the Department of Justice Criminal, Civil, and Tax Divisions to provide litigation and investigative support in fraud cases; and
* $80 million for investigators and analysts at the U.S. Postal Inspection Service, the U.S. Secret Service, and the Office of Inspector General for the Department of Urban Housing and Development to combat fraud in Federal assistance programs and financial institutions.

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