67 in area arrested in mortgage fraud sweep

The Chicago portion of a major national crackdown on mortgage fraud has netted 67 people ranging from mortgage brokers to attorneys, federal officials announced Thursday.

The arrests were announced as Justice Department officials in Washington unveiled Operation Malicious Mortgate, an initiative designed to stem fraud that has cost borrowers who were victims an estimated $1 billion.

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"Mortgage fraud inflicts serious damage on financial institutions but more importantly makes life more difficult for ordinary citizens," U.S. Attorney Patrick J. Fitzgerald said in a statement issued by his office.

The charges were being unveiled at a Chicago news conference.

The first charges in the crackdown came in March and the most recent were placed within the last several days, federal prosecutors said.

The Chicago-area cases included:

bull; Thirty-three defendants in two companion cases with what federal prosecutors called "the same alleged ringleader." They said the cases involved fraudulently obtained loans totaling $111 million for 183 homes stretching from the Chicago suburbs to Nevada and California.

bull; Three defendants charged with scheming to fraudulently obtain mortgages on 28 properties totaling more than $40 million from large banks and mortgage companies. Prosecutors said losses totaled $6 million.

bull; A dozen defendants accused of fraud and identity theft for allegedly using stolen and bogus identities to obtain more than $3.2 million in home loans.

Prosecutors said the dozen new cases filed in the Chicago area since March should show that the government has made cracking down on mortgage fraud a high priority.