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Feds crack down on mortgage fraud

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WBFO News photo by Eileen Buckley
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US Attorney William Hochul announces mortgage fraud crackdown

By Eileen Buckley

http://stream.publicbroadcasting.net/production/mp3/wbfo/local-wbfo-908222.mp3

Buffalo, NY – A federal crackdown is underway against mortgage fraud. Operation: Stolen Dreams targets local and national mortgage fraudsters throughout the US.

US Attorney General Eric Holder announced results of the national mortgage fraud investigation. In Western New York, seven cases are being prosecuted with another 15 under investigation. US Attorney for the Western District William Hochul and his investigators met with reporters Thursday in downtown Buffalo.

"Home ownership is one of the most cherished aspects of American society," Hochul said. "Mortgage fraud affects the economy, from blight to the financial community."

In Buffalo, the Financial Fraud Enforcement Task Force has been in place since April. US Assistant Attorney Kathleen Lynch says mortgage fraud is occurring in a variety of ways.

"We have fake or straw buyers who take out mortgages that fail," Lynch said. "We have investment schemes using mortgages that promise returns that can never be guaranteed." One of the fraud cases being prosecuted in Buffalo involves the owner of Empire Logging and Timber, Robert Baschmann. US Assistant attorney Trini Ross says he claimed to offer 30-year mortgage loans with a fixed rate to his clients. But when the clients made payments to him the money was never invested. The case involves 140-victims throughout the US.

Another local case involves an attorney who acted as the settlement attorney for mortgage and refinance closings in the Buffalo area. Investigators called it a "Ponzi" scheme.

Click the audio player above to hear Eileen Buckley's story now or use your podcasting software to download it to your computer or iPod.