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INVESTIGATION AND PROSECUTION

OF

HOUSING AND URBAN DEVELOPMENT

AND

VETERANS ADMINISTRATION

FRAUDS

Prepared by:
Fraud Section
Criminal Division
U.S. Department of Justice

December 1987

depas USA
526*89

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This paper addresses the growing problem of fraud and abuse within the

Department of Housing and Urban Development's (HUD) single family mortgage

insurance programs and the Veterans Administration's (VA) home loan guaranty

program.

In an effort to assist in the prosecution of such matters, it provides

background information with respect to the home loan programs and outlines the

necessary procedures and requirements for participation.

Further, this paper

provides a prosecutor with the common types of schemes utilized by most such

offenders and suggests certain investigative and prosecutive techniques for

effective case management and trial preparation.

2.0 BACKGROUND

HUD, VA and the Federal Bureau of Investigations (FBI) have recently

joined together in a limited number of jurisdictions and created task forces to

investigate fraud and abuse in the home loan insurance/guaranty programs.

Because investigations have revealed this problem to be escalating throughout

the country, the Economic Crime Council, an internal Department of

Justice

advisory group, has taken the problem under special consideration.

2.1 Overview and Purpose

The purpose of the VA home loan guaranty program and the HUD single

family mortgage insurance programs is to facilitate the extension of mortgage

credit on favorable terms by private lenders to eligible veterans and non

veterans, respectively.

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