PORTLAND, Ore. (AP) -- A nationwide crackdown on mortgage fraud -- dubbed "Operation Stolen Dreams" -- includes 39 defendants and 140 properties in Oregon.
Dwight Holton, U.S. attorney for Oregon, said Thursday the 39 people have been charged, pleaded guilty or have been sentenced since March 1. They include a dozen people involved in the collapse of Desert Sun Development. Banks reportedly lost more than $19 million after lending the Bend company money for commercial and residential projects, some of which were never built.
The FBI in Oregon has received almost 5,000 reports of fraud since the height of the housing market in 2006, Holton said. Many of the investigations remain active and additional federal indictments are expected.
"There are as many schemes as there are con artists," Holton said.
The national probe includes 1,215 criminal defendants in cases that involve more than $2.3 billion in losses. It focused on higher-level players, not the next-door neighbor who lied on a mortgage application.
In many Oregon cases, Holton said, a property's selling price was falsely inflated. Those fake prices were used as comparables for both legitimate and illegitimate transactions, contributing to the bubble that put home ownership out of reach for many median-income families.
Fifteen of the 39 defendants were lending and real estate professionals, including mortgage brokers, real estate agents, a bank loan officer and a certified public accountant. In the Desert Sun case, an inspector lied when he said buildings were going up as scheduled on lots actually vacant.
"It's amazing how broad this has been," said David Tatman, administrator for the state Department of Consumer & Business Services.
Holton said many of the crimes highlighted Thursday are the "hangover" from the bubble days. Investigators, he said, have increasingly turned their attention to "rescue fraud," when people prey on troubled homeowners with deals too good to be true.
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