FBI attacks mortgage fraud

A national effort to crack down on mortgage fraud schemes has snagged a pair of Utahns.

The U.S. Department of Justice and FBI's Operation Malicious Mortgage program led to federal grand-jury indictments for Jerry C. Huff , 49, of Hurricane, and Bryan D. Conrad, 37, of Salt Lake City. The indictments, announced Thursday, were returned last week, and summons will be issued for both to appear for arraignment in federal court.

Since March 1, Operation Malicious Mortgage has resulted in 144 mortgage fraud cases, in which 406 defendants were charged.

Sixty arrests were made Wednesday in mortgage fraud-related cases. The FBI estimates that about $1 billion in losses were inflicted by the mortgage-fraud schemes.

"There is a tremendous amount of effort that is being expended on the part of state, local and federal investigators to root out mortgage fraud (and) insidious lending industries and hopefully restore confidence in a sagging and difficult market in the housing industry right now," U.S. Attorney Brett L. Tolman said Thursday at a news conference in Salt Lake City.

Tolman characterized the Utah cases as relatively "small" but noted that "you're neither too small nor too large for these types of investigations."

The FBI has established 38 task forces nationally to fight mortgage fraud. FBI Special Agent in Charge Timothy J. Fuhrman said Thursday that the bureau has 1,380 open investigations nationally, including 31 in Utah.

All mortgage-fraud cases involve a scheme with a material misrepresentation by people to obtain a load fraudulently and at a loss to lending agencies, he said.

Conrad is charged with bank fraud and aggravated identity theft in a scheme to get money or property from financial institutions by falsely using the identities of other people. The two counts of bank fraud carry a penalty of up to 30 years in federal prison per count and a $1 million fine. Aggravated identity theft has a two year-mandatory minimum sentence.

Huff is charged in a five-count indictment with wire fraud, money laundering and failure to file a federal tax return. He used several methods to get a $250,000 second mortgage on his Moab home, according to the indictment. Among the methods were submitting a loan-application package that contained false information about his personal income and the ability to repay the second mortgage. He also is accused of submitting a fictitious house appraisal and giving the false impression that he had filed tax returns in 2001 and 2002, when he actually did not file returns.