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Mortgage Fraud - Operation Malicious Mortgage

Hundreds swept up in mortgage fraud arrests


More than 400 real estate industry players have been indicted since March - including dozens over the last two days - in a Justice Department crackdown on incidents of mortgage fraud nationwide that stem from the country's housing crisis.

The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion.

"Mortgage fraud poses a significant threat to our economy, to the stability of our nation's housing markets and to the peace of mind of millions of American homeowners," Deputy Attorney General Mark Filip said at an afternoon news conference.

Since March 1, 406 people have been arrested in the sting dubbed "Operation Malicious Mortgage" resulting from 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI.

Law enforcement officials said their stepped-up focus on mortgage cases aims to combat problems that have grown out of the risky lending practices prevalent until the mortgage market collapse started last year. Officials have identified 10 "mortgage fraud hotspots" nationwide in California, Colorado, Texas, Minnesota, Michigan, Illinois, Ohio, New York, Georgia and Florida.

To people who have committed fraud or are contemplating doing so, FBI Director Robert Mueller said: "We will find you, you will be investigated and you will be prosecuted."

Those named in the cases include housing developers, mortgage lenders and brokers, lawyers, real estate agents and appraisers, said Sharon Ormsby, section chief in charge of financial crimes for the FBI.

In some cases, gang, drug and organized crime investigations have resulted in mortgage fraud cases because such schemes enable criminals to launder money, Ormsby said.

Mortgage foreclosure rescue scams, which promise to help struggling homeowners stave off foreclosure and keep their homes, also have become a major problem, officials said. Typically, unsuspecting owners sign over their homes and then find they are victims of fraud.

In separate arrests, two former Bear Stearns (nyse: BSC - news - people ) managers in New York were indicted Thursday, becoming the first executives to face criminal charges related to the collapse of the subprime mortgage market.

Across the country, reports of mortgage fraud have soared over the past year as the subprime mortgage market collapsed, and defaults and foreclosures soared.

Banks reported nearly 53,000 cases of suspected mortgage fraud last year, up from more than 37,000 a year earlier and about 10 times the level of reports in 2001 and 2002, according to the Treasury Department's Financial Crimes Enforcement Network.

In recent months, the FBI has been investigating more than 1,400 mortgage fraud cases and 19 companies - including Bear Stearns - tied to the subprime mortgage crisis.

Officials declined to say who might be the next corporate target, but Mueller said the investigations focus on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments.

Under review for potential fraud are: investment banks, hedge funds, credit rating agencies, brokerage houses and due diligence firms - which evaluate loans packaged into investments.

Similar to the federal investigations of Enron Corp. and WorldCom Inc., the cases are complex and rely on intense scrutiny of documents, Mueller said.

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6 in Seattle area indicted in "Malicious Mortgage" crackdown

Six Seattle-area people have been indicted by a federal grand jury in connection with "Operation Malicious Mortgage," a national takedown on mortgage fraud schemes that has resulted in more than 400 arrests nationwide and losses estimated at more than $1 billion — nearly $8.4 million in the Seattle case alone.

Those indicted included a disbarred lawyer, a former bank loan officer and a mortgage broker, according to the U.S. attorney's office. Others include the owner of several shell corporations who "flipped" houses as part of a scheme using unqualified "straw" buyers who allowed inflated loans to be made in their names, only to default on the mortgages, the indictment alleges.

The case is among 144 prosecutions involving 406 people nationally. More than 60 arrests were made Wednesday, the Department of Justice announced.

Among them was Robert Ernest Brandt, 40, a former Bothell attorney who was disbarred in 2006 for failing to properly maintain his client escrow accounts. According to the Washington State Bar, more than $3 million turned up missing from the accounts.

The indictment alleges that Brandt conspired with several others to "flip" houses in Seattle's red-hot real-estate markets in 2004 and 2005, using the shell companies to buy the homes. The alleged conspirators would create loan papers for the straw buyers for inflated purchase prices and pay them up to $20,000 to sign the papers. The loans would not be paid and the banks would foreclose for a loss.

Also indicted were William Anderson, 47, of Bellevue; Mustafa "Marc" Khosraw, 46, of Sammamish; Isaac Palmer, 42, of North Bend; Kristyn Jupiter Moss, 38, of Tacoma; and Zachary Joseph Namie, 30, of Seattle.

Anderson purportedly operated the shell companies that purchased the homes; Moss was a loan officer at Viking Bank and helped create the fraudulent documents; and Brandt and Anderson ran a business called "Escrow Authority" that closed on the sales. Khosraw was a mortgage broker and Namie a loan officer who helped falsify documents, according to the charges. Palmer operated a construction firm, helped recruit straw buyers, and lied that some of them worked for him so they could qualify for loans, the indictment alleges.

In announcing the crackdown, Deputy Attorney General Mark Filipo said the Department of Justice is committed to prosecuting mortgage fraud, which he called "a significant threat to our economy, to the stability of our nation's housing market and to the peace of mind of millions of American homeowners."

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Jamie Lynn Spears Baby


You can now call Britney Spears “auntie.” Yesterday morning, her 17-year-old sister, Jamie Lynn, gave birth to a baby girl. The National Enquirer is reporting that the newborn, whom Jamie Lynn named Maddie Briann, weighed six pounds and ten ounces and was delivered by cesarean section because she was in a breech position. As of this writing, there is no word on whether Maddie will be a “Spears” or an “Aldridge.” Jamie Lynn is engaged to Maddie’s father, Casey Aldridge, but the two have not released a wedding date. At this point, they’ll probably want to wait until the shock of constant diaper changes and feedings subsides.

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Ark. health clinic evacuated after illnesses

LITTLE ROCK, Ark. (AP) — A state-affiliated health clinic in northwestern Arkansas was evacuated on Thursday after more than 30 people were sickened with symptoms including nausea, dizziness and in some cases, uncontrollable drooling.

None of the 31 people sickened at the Washington County Health Unit in Fayetteville, including two patients, were considered to be in life-threatening condition, health officials said. All but six of those sickened were treated and released from area hospitals by Thursday afternoon.

A hazardous materials unit from the National Guard base at Camp Robinson was sent to the clinic to run tests, Arkansas Department of Health spokeswoman Ann Wright said.

Health officials were looking into whether the outbreak might be related to an exterminator's visit to the clinic this week.

"We always have to hold out the possibility that someone brought something in," said John Gibson, county administrator. "I would hope that's not the case. The Health Department is a pretty benign organization that helps people. We've never received any threats, but you have to hold out all possibilities."

The clinic in Fayetteville, about 140 miles northwest of Little Rock, offers health education and various services, including vaccinations.

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Who's Your City

Choosing a spouse and choosing a career are important life decisions—but perhaps even more predictive of our all-round personal happiness is our choice of living location, argues Florida (The Rise of the Creative Class) in this informative if somewhat dry tome. As globalization makes the world effectively smaller, economic growth concentrates in certain mega-regions of large superstar cities, leaving other regions in the proverbial dust.

The areas where we live are also affected by our increasingly mobile culture, housing priorities that change as we age (from starter homes to family-friendly suburbs to empty nests and finally retirement centers) and the global economy.

Few of the author's conclusions are new—people gather where they can make friends with others like them, personality types tend to cluster—type A to urban areas, type B to rural—and the book's tone wanders from broad, Friedmanesque discussion of the world economy to home-buying advice as well as statistic-and-theory-heavy text as though unsure of its intended audience. Yet the author opens up a complex, underexamined subject along the way. (Mar.)

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Ralph Cioffi And Matthew Tannin Arrested

Bear: A Look at Who’s Repping Cioffi and Tannin

With former Bear fund managers Ralph Cioffi and Matthew Tannin arrested today on charges of securities fraud, including insider trading, here’s a look at their lawyers.

Edward J.M. Little for Cioffi: Little (Boston College, Boston Law 59 years old), is a partner at Hughes Hubbard & Reed. According to his bio, he’s had a role in some of the biggest white-collar cases in recent history, including Westar, Enron, Royal Ahold, Lucent, Tyco and Adelphia. He even had a cameo in the CIA leak case (remember, Scooter Libby, Valerie Plame?), repping pro bono a “senior White House” official in grand jury proceedings. He chairs the firm’s white-collar practice group. LB readers might recall that HH&R is the same firm, NY-based, that orchestrated Merck’s strategy for its Vioxx litigation.

Susan Brune for Tannin: Brune has an entirely different background. She went to Michigan undergrad, got an M.A. in American History at Columbia and went to Harvard Law, graduating in ‘88. She was at the Southern District from 1990 to 1997 and is currently at what appears to be a small (under 20 lawyers) boutique shop focusing on commercial litigation and white-collar defense. She co-founded her firm, Brune & Richard, with another HLS classmate. Her bio says her experience includes securities fraud, accounting fraud, money laundering, antitrust, FCPA, customs violations and bank fraud.

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Bang Stick : Deputies Reprimanded After Officer Bitten By Alligator

Witness: 'Alligator Was Laughing At Him'

Deputy Keith Baughman, 39, responded to calls of a large alligator loose in the parking lot of the Brightside Apartments located on Caribbean Street in May.

Baughman and other deputies found the alligator roaming the area.

Witnesses said the deputy threw a towel on the alligator, jumped on its back and tried to wrestle it. Baughman was thrown off the back and then bitten, witnesses said."

His pants ripped up and blood was gushing out and everything," witness Carlos Martinez said. "He started limping away and the alligator was laughing at him.

The dude then shot it twice in the head."The Volusia County Sheriff's Office said a second officer, Deputy Jason Stickles, 27, shot the alligator repeatedly."I said, 'Don't shoot it,'" witness Jasmin Harris said. "Just wait until the animal people come out.

I don't know why they shot it in the first place. They shouldn't have jumped on it. That wasn't their job."

The alligator was hit but did not die and continued to roam the apartment complex.

A trapper eventually came out and killed the animal with a bang stick.

Officials said Baughman and the other officers received the reprimand for not following policy.

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Juneteenth brought freedom to Texas

IT IS IMPOSSIBLE to overstate the importance of the news that arrived in Texas on June 19, 1865, and its life-changing significance is still being celebrated today.

The Civil War had been over for more than two months when Major Gen. Gordon Granger of the Union Army arrived in Galveston on that historic day with the stunning news that the war was over and the slaves were free.

An estimated 250,000 slaves had been living in the Confederate state of Texas. One day they were considered to be the property of another person, and the next day their lives were changed forever.

They were free.

It wasn't Gen. Granger's news that freed them. The Emancipation Proclamation had accomplished that on Jan, 1, 1863. Nonetheless, the news on June 19, 1865, made freedom a reality for slaves in Texas, and the date has never been forgotten.

When June 19 arrived in 1866, the first anniversary of the glad tidings was celebrated, and the same thing happened on the next June 19. The anniversary has been celebrated every year since and came to be known as Juneteenth - a shortened version of the date June 19.

The holiday isn't just celebrated in Texas. It has become well-known outside the borders of the Lone Star State. More than half the states have passed legislation making Juneteenth either a holiday or a day of special recognition. According to the Web site, Juneteenth celebrations are scheduled in most if not all states.

It was a day that forever changed the history of Texas. It is not surprising the day is especially meaningful for black Texans, but we do not see it as a holiday just for blacks. Juneteenth is a day that should be celebrated by everyone who loves freedom and detests the fact that slavery ever existed in our country.

Editorials represent the opinion of The Avalanche-Journal Editorial Board, which consists of Publisher Stephen A. Beasley, Editor Terry Greenberg, Editorial Page Editor Joe Hughes, editorial writer Joe Gulick, in addition to input provided by community advisory board members Lee R. Bobbitt, Adrienne Cozart and Irasema Velasquez.

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David Beckham Strips For Armani

Beckham to strip down again?

David Beckham is gearing up to set hearts racing by posing in his underwear for another sexy Emporio Armani ad.

The footie ace will unveil his new campaign with a giant mural in San Francisco, where he will reveal one of the images.

Renowned fashion photographers Mert Alas and Marcus Piggott on the beaches of Malibu took the pics, reports the Daily Telegraph.

Becks in the meantime, put in an appearance at the Macy's men's store in Bay Area to meet and sign autographs for the first 175 fans who bought 200 dollars worth of Emporio Armani men's underwear.

The latest Beckham campaign will feature on billboards and in press ads around the world promoting the latest range of Armani underwear. The new collection will hit stores in the U.S. in August and Europe in July.

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Black Gold TV

'Black Gold' drills deep into TV's tough-guy reality field

The price of oil has a different meaning for those who draw it from the earth.

The risks of drilling, both physical and financial, are at the heart of truTV's Black Gold (tonight, 10 ET/PT). It follows West Texas oil rig workers fighting the clock and a budget in the search for oil.

"Drilling for oil … is fascinating and dangerous at the same time," truTV executive vice president Marc Juris says. "When we looked at the characters, the stakes and how relevant this world is, in terms of the role oil plays in our lives, it hit on a lot of emotional targets."

He doesn't believe hostility to high oil prices will transfer to the roughnecks and drillers. "They represent what this country is all about," he says. Black Gold "is about American oil, not about being dependent on foreign oil."

Black Gold is reality's latest tough guy, one of a growing genre following workers who pursue dangerous, physical jobs. It comes from producer Thom Beers, whose shows include Deadliest Catch, Ice Road Truckers and Ax Men.

Juris says the show fits truTV's goal of "telling stories about real-life people." The name change for the cable channel formerly known as Court TV reflects broadened offerings, though daytime court coverage continues under the brand In Session.

Tough-guy shows have multiplied with the format's success in attracting viewers, particularly young men. "Since younger men watch the least amount of television of any adult age group, if you can get a show that attracts them, you'll see a list of advertisers signing up," says Brad Adgate of ad buyer Horizon Media.

Mike LaMonica, an owner of a company that contracts two of Black Gold's rigs, says he initially didn't want to take part because of Hollywood's depiction of oilmen, such as Dallas' J.R. Ewing and There Will Be Blood's Daniel Plainview.

But he thought a series might educate viewers about the oil business, as Deadliest Catch had done for crab fishing, and he heard good things about Beers' company from actor Matthew McConaughey, whose brother Rooster supplies pipe to LaMonica's company. "Rooster had Matthew check (them) out. He said, 'Yeah, these are good guys.' "

Big money is an obvious reward, but drilling is a gamble for investors. Even with advanced technology, they can come up dry, says LaMonica, who used his life savings to start the company three years ago.

Black Gold records accidents as well as drilling successes and follows the workers as they unwind — in some cases, to excess — after long, draining days in the sun.

LaMonica, an engineer who has worked on rigs, says drilling's dangers are real. "Safety is No. 1. We don't want anybody hurt," he says. "I've still got burned into my brain when I watched a guy get killed in front of me several years ago.

"He'd only been in the oil industry three days. It was pure inexperience that killed him."

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Yahoo Introduce Ymail

Yahoo starts Rocketmail, YmailFor many Internet users, registering their own name as a Web-based e-mail address is next to impossible. Unless they possess a particularly uncommon name, most users settle for an address with a number or nickname.

Today, Yahoo Inc. will roll out two new e-mail services - Rocketmail and Ymail - that the company hopes will start a "global race" among Internet users looking to ditch their high school and gimmicky e-mail addresses and score their desired online handle.

Although e-mail remains the most pervasive form of online communication, analysts say younger generations are now using social networking sites to send messages.

"What we are seeing is that teens increasingly are turning to different forms of communications, such as Facebook and MySpace, to communicate with each other instead of using e-mail," said Jennifer Simpson, a senior online interaction analyst with the Yankee Group in Boston.

In an effort to remain relevant and keep people coming back to their portal sites, Web giants such as Yahoo, Microsoft Corp. and Google Inc. are pushing back against their upstart rivals and scrambling to find new ways to integrate their instant messaging and e-mail services to make their sites the first destination users visit online.

E-mail and instant messaging services drive hefty amounts of traffic to the main pages of their parent sites, which increases the value of the advertising real estate on those sites, said Canaccord Adams analyst Colin Gillis.

Although Yahoo doesn't mine users' e-mails for keywords to provide contextual advertising the way Google's Gmail does, it does deliver targeted advertising based on the personal information users provide when they sign up.

Yahoo Mail is the most popular Web-based e-mail portal in the world, with more than 266 million unique users in April, topping Hotmail's 264 million users and Gmail's 102 million visitors, according to data from Web tracker ComScore Inc.

"The reality is the name space for is nearly saturated," said Naomi Lipowski, head of communications products for Yahoo Canada.

Canadians wanting a or address can begin signing up at 4 p.m. today through the main Yahoo Mail page.

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Charlotte Church Expecting

Charlotte Church pregnant for second time

The singer Charlotte Church has announced that she is expecting her second child with her rugby player boyfriend Gavin Henson.

Charlotte Church and Gavin Henson live near Bridgend in South Wales
Charlotte Church and Gavin Henson live near Bridgend in South Wales

The couple, whose daughter Ruby was born in September, are said to be 'delighted' by the news.

The baby is due in November but the star has vowed to press ahead with the filming of the third series of her chat show this summer.

A statement published on Ms Church's official website said the couple were "delighted" to announce a second baby is on the way.

The statement said: "The couple are thrilled, as are their immediate families."

The 22-year-old, formerly known for her love of partying, has appeared to settle down since starting her family.

Speculation about a possible pregnancy was fuelled when Church was pictured looking particularly curvaceous.

She recently backed a campaign to encourage mothers to breast-feed.

She and Henson, 26, live in a spacious small-holding near Bridgend in South Wales.

Her mum Maria, 41, said: "People think Charlotte still loves nightclubs, but she is so much happier at home."

Church will continue as host of Channel 4's The Charlotte Church Show in July and August of this year.

Henson has missed the wales tour to South Africa with an ankle injury.

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