Sen. Jim Webb, D-Va., favors “aggressive” monitoring of the mortgage and corporate financial industry in order to root out fraud.
That’s why he supported the “Fraud Enforcement and Recovery Act of 2009” Tuesday in the U.S. Senate. Introduced in February by Sen. Patrick Leahy, D-Vt., and Sen. Chuck Grassley, R-Iowa, the legislation is intended to rebuild and strengthen the government’s ability to investigate and prosecute mortgage and corporate fraud.
Ever-increasing fraud in these industries contributed to the economic recession, Webb said in a release from his office.
“We have seen the rate of alleged fraud skyrocket to more than 65,000 reported cases in 2008 compared to just 4,700 in 2001,” said Webb, a Democrat.
And yet, Webb continued, there are fewer fraud investigators in place than during the 1980s savings and loan crisis.
The Fraud Enforcement and Recovery Act would authorize $245 million over the next two fiscal years to hire hundreds of additional prosecutors, agents and staff at the Department of Justice, FBI, U.S. Postal Inspection Service, Secret Service and Office of Inspector General, enabling the Housing and Urban Development Department to investigate and prosecute financial fraud.
According to the release, the bill would also modernize fraud and money laundering laws in an effort to strengthen prosecutors’ ability to fight fraud.
This would include updating the federal definition of “financial institution” to include mortgage lending businesses not directly regulated or insured by the federal government.
These businesses account for nearly half of all residential mortgages.
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