Spurred by rising public anger, federal and state investigators are preparing for a surge of prosecutions of financial fraud, reports the New York Times. Across the country, attorneys general have already begun indicting dozens of loan processors, mortgage brokers and bank officers. Last week alone, there were guilty pleas in Minnesota, Delaware, North Carolina and Connecticut and sentences in Florida and Vermont – all stemming from home loan scams.
With the Obama administration focused on stabilizing the banks and restoring confidence in the stock market, it has said little about federal civil or criminal charges. But its proposed budget contains hints that it will add to this weight of litigation, including money for more agents to investigate mortgage fraud and white-collar crime, and a 13 percent raise for the Securities and Exchange Commission. General Eric H. Holder Jr. is said to be weighing a range of strategies. Obama wants to “seize the opportunity to send a message of zero tolerance for mortgage fraud,” said Connecticut's attorney general, Richard Blumenthal.