Iowa AG announces partnership with U.S. attorney

By Jessica M. Karmasek | Dec 21, 2010


DES MOINES, Iowa (Legal Newsline) - Iowa Attorney General Tom Miller and U.S. Attorney Nick Klinefeldt announced on Monday the creation of the Iowa Mortgage Fraud Working Group.

According to Miller's office, the working group "will identify and investigate targets for criminal prosecution in the Southern District of Iowa and perform other important functions in the fight against mortgage fraud."

Klinefeldt and Miller said in a joint statement they expect the working group to "effectively" and "efficiently" protect the public from mortgage fraud and ensure that wrongdoers are brought to justice.

The working group, they said, combines the civil expertise of the Attorney General's Office in the mortgage industry with the criminal expertise of the United States Attorney.

On the federal level, the working group will utilize the investigative expertise of agencies such as the Federal Bureau of Investigation and Department of Housing and Urban Development-Office of Inspector General. Other federal agencies that may participate in the working group include the Secret Service, Internal Revenue Service, United States Postal Inspection Service and Social Security Administration.

On the state level, the working group will include attorneys and investigators with the Attorney General's Consumer Protection Division, as well as the Iowa Division of Banking.

Miller is currently leading the nationwide mortgage foreclosure investigation, in conjunction with 50 state attorneys general and state banking and mortgage regulators in more than three dozen states.

The effort, which was launched in October, began with inquiries into so-called "robosigning" practices by several mortgage companies, and has since broadened into identifying and addressing additional alleged improper foreclosure practices.

For the past three years, Miller also has led more than a dozen state attorneys general and state banking regulators in the State Foreclosure Prevention Working Group, which has monitored foreclosure data and has recommended and helped implement foreclosure prevention efforts.

In addition, Miller helped launch Iowa's Mortgage Help Hotline, which helps consumers facing foreclosure. He also has pursued several mortgage fraud cases against companies and individuals who have tried to take advantage of Iowans.

"This new partnership between my office and the United States Attorney's Office will help us take some of the most egregious mortgage fraud cases to the next level," Miller said in a statement.

"There are some situations where civil enforcement efforts simply are not enough to punish the wrongdoers. We look forward to working with the United States Attorney to ensure that criminal enforcement tools are also available."

Klinefeldt said the partnership will have an "immediate impact" on the effectiveness of federal efforts to combat mortgage fraud.

"Attorney General Miller has been a nationwide leader in using civil enforcement tools to combat mortgage fraud," he said in a statement.

"This relationship will allow federal prosecutors and investigators to obtain the benefit of the experiences of the Attorney General, get leads on new cases, and refer cases back to the State in instances where federal criminal prosecution is not warranted but state civil or criminal enforcement efforts might be."

Klinefeldt said he expects the relationship with Miller's office to result in the prosecution of even more criminal mortgage fraud cases.

"Our standards for deciding who to criminally prosecute will remain as high as ever," he said. "But we expect the partnership with the Attorney General to result in finding more targets whose conduct satisfies those high standards."

Miller and Klinefeldt said the working group will meet regularly and perform several important functions, including:

- It will share information regarding complaints from consumers and persons in the mortgage industry about possible mortgage fraud schemes;

- When feasible, state investigators will participate directly in federal criminal investigations and prosecutions. Even when direct participation is not an option, the working group will allow state mortgage industry experts to provide background information
and resources to federal prosecutors and investigators regarding mortgage industry practices and procedures; and

- The group will educate the public regarding fraudulent schemes in the mortgage industry and provide guidance to consumers about how to avoid becoming victims of mortgage fraud. The group also will work with mortgage industry participants to find the most effective ways to prevent fraud.

The criminal penalties associated with mortgage fraud vary according to the particular charge, but the most common federal charges (bank fraud, wire fraud, mail fraud, and false statements to a bank) carry maximum terms of imprisonment of 30 years and fines of up to $1 million, the Attorney General's Office said.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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