Attorney General Eric Holder along with Housing and Urban Development (HUD) Secretary Shaun Donovan, Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami and New York Attorney General Eric T. Schneiderman today announced the formation of the Residential Mortgage-Backed Securities Working Group under President Obama's Financial Fraud Enforcement Task Force (FFETF).
At the direction of the President, this Working Group brings together the Department of Justice (DOJ), several state attorneys general and other federal entities to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities. This effort will be in coordination with and in addition to the ongoing efforts and investigations by the Justice Department, FFETF members and state and federal law enforcement investigating and prosecuting other types of financial fraud.
Attorney General Holder announced that the new Working Group will consist of at least 55 Department of Justice attorneys, analysts, agents and investigators from around the country. Currently, 15 civil and criminal attorneys are part of the Working Group, along with 10 FBI agents and analysts who will be assigned to the Working Group efforts. An additional 30 attorneys, investigators and other staff around the country will join the Working Group efforts in the coming weeks. This team will join existing state and federal resources investigating similar misconduct under those authorities.
The goals of this collaboration will be: to hold accountable any institutions that violated the law; to compensate victims and help provide relief for homeowners struggling from the collapse of the housing market, caused in part by this wrongdoing; and to help Americans finally turn the page on this destructive period in our nation's history.
"This Working Group brings together federal and state partners to strengthen current and future efforts to investigate and prosecute instances of wrongdoing in the residential mortgage-backed securities market," said Attorney General Holder. "With this focus on collaboration -- and by bringing our government's full enforcement resources to bear -- I have no doubt that we will improve our ability to recover losses, to prevent fraud, to bring abuses to light, and to hold those who violate the law accountable. That's what the challenge before us demands, and that's what the American people deserve."
The working group will be co-chaired by senior officials at the Department of Justice and SEC, including Lanny Breuer, Assistant Attorney General, Criminal Division, DOJ; Robert Khuzami, Director of Enforcement, SEC; John Walsh, U.S. Attorney, District of Colorado; and Tony West, Assistant Attorney General, Civil Division, DOJ.
The working group will also be co-chaired by New York Attorney General Schneiderman, who will lead the effort from the state level. Other state Attorneys General have been and will be joining this effort.
"I am pleased to co-chair this important effort. Each of us offers different tools and talents, but we are all united by a common and continuing desire to identify misconduct in the mortgage securitization process," said SEC Enforcement Director Khuzami. "The SEC has issued scores of subpoenas, obtained millions of documents, and interviewed dozens and dozens of key witnesses related to mortgage-backed securities. This collaborative effort will enable us pool our knowledge and leverage our resources."
"Millions of American families have been harmed by the foreclosure crisis," said HUD Secretary Donovan. "These families deserve justice. They deserve relief. That is why this investigation is so important. With a new Residential Mortgage-Backed Securities Working Group led by Attorney General Holder and state leaders like New York Attorney General Schneiderman, we will build on the work of the President's Financial Fraud Enforcement Task Force by investigating misconduct we know led directly to the financial crisis. And I'm proud that the Office of the HUD Inspector General David Montoya --which over the past year has been central to uncovering wrongdoing with respect to faulty foreclosure servicing practices--will play a critical role in the mortgage origination component of this review."
"I would like to thank President Obama and Attorney General Holder for their leadership in combating financial fraud in this country and I look forward to co-chairing this working group that marshals state and federal resources to build on those efforts by bringing justice on behalf the victims of the misconduct that caused the mortgage crisis," said Attorney General Schneiderman. "In coordination with our federal partners, our office will continue its steadfast commitment to holding those responsible for the mortgage crisis accountable, providing meaningful relief for homeowners commensurate with the scale of the misconduct, and getting our economy moving again. The American people deserve a thorough investigation into the global financial meltdown to ensure nothing like it ever happens again, and today's announcement is a major step in the right direction."
The Obama Administration is committed to ensuring that justice and relief are provided for the millions of American families harmed by the financial crisis.
President Obama created the Financial Fraud Enforcement Task Force by executive order in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys' Offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud and bring to bear a powerful array of criminal and civil enforcement resources.
Since its formation, the Task Force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Task Force members have charged a record number of mortgage fraud cases in the past two years, trained more than 100,000 professionals responsible for awarding and overseeing Recovery Act funds and held regional summits around the country to discuss strategies, resources and initiatives as well as to meet with communities most affected by the financial crisis.
Learn more about the Residential Mortgage-Backed Securities Working Group and the Financial Fraud Enforcement Task Force at www.stopfraud.gov .
Download Attorney General Holder's memo to the Financial Fraud Enforcement Task Force here: http://www.justice.gov/ag/residential-mortgage-backed-securities.pdf.