Investigations

SIGTARP, a sophisticated, white-collar criminal investigative agency, is committed to robust criminal and civil enforcement against those who waste, steal, or abuse TARP funds. SIGTARP partners with law enforcement agencies to investigate and prosecute, among other things, TARP-related accounting fraud, securities fraud, insider trading, bank fraud, mortgage fraud, mortgage modification fraud, wire fraud, false statements, obstruction of justice, money laundering, and tax crimes. SIGTARP currently has more than 150 ongoing criminal and civil investigations.

From SIGTARP’s inception through September 30, 2011, the agency and its law enforcement partners were responsible for:

• Criminal charges filed against 51 individuals, including 36 senior officers
• Criminal convictions of 28 individuals
• Civil charges filed against 37 individuals, including 25 corporate or senior officers, and 18 companies
• Recovery of $151 million in assets
• Saving $553 million in taxpayer money by preventing TARP funds from going to the now-failed Colonial Bank

SIGTARP Hotline

The SIGTARP Hotline (877-SIG-2009) provides a simple, accessible way for the American public to report concerns, allegations, information, and evidence of violations of criminal and civil laws in connection with TARP. From its formation in February 2009 through September 30, 2011, the SIGTARP Hotline has received and analyzed more than 28,000 contacts. The SIGTARP Hotline can receive information anonymously and protects the confidentiality of whistleblowers to the fullest extent possible.

Investigative Cases

Although the majority of SIGTARP’s investigative activity remains confidential, below is a summary of individual cases in which there have been significant public developments.

Reports noted as PDF require a special plugin. To obtain a free reader for this format, please visit the Adobe^® website.

Taylor, Bean & Whitaker Mortgage Corporation and Colonial Bancgroup [+]

• On June 15, 2010, Lee Bentley Farkas, the former chairman of Taylor Bean & Whitaker Mortgage Corporation (“TBW”) was arrested by SIGTARP agents and others and charged in the Eastern District of Virginia with offenses including bank fraud, wire fraud, and securities fraud. Among other things, Farkas was charged for his role in attempting to steal more than $550 million from TARP through Colonial Bancgroup’s  (“Colonial”) fraudulent application for funds under the Capital Purchase Program (“CPP”). Farkas was also charged in an alleged fraud scheme involving more than $1.9 billion that contributed to the failures of Colonial and TBW in 2009 and that victimized numerous other public and private institutions.  Specifically, as alleged in the indictment, Farkas and his co-conspirators, which included executives at Colonial, caused Colonial to purchase from TBW more than $400 million in what amounted to fake mortgage loan assets, held on the bank’s books, including loans that TBW had already sold to other investors, and fake interests in pools of loans. According to court documents, Farkas and his co-conspirators at TBW also misappropriated hundreds of millions of dollars from Ocala Funding, LLC (“Ocala Funding”), a TBW-related entity controlled by Farkas. Ocala Funding sold asset-backed commercial paper to financial institution investors and was required to maintain collateral in the form of cash and/or mortgage loans that were at least equal to the value of the outstanding commercial paper. Farkas and his co-conspirators allegedly diverted cash from Ocala Funding to TBW to cover TBW’s operating losses, and, as a result, created significant deficits in the amount of collateral Ocala Funding possessed to back outstanding commercial paper. To cover up the diversions, the conspirators allegedly sent false information to Ocala Funding’s investors, misleading them into believing that they had sufficient collateral backing commercial paper. According to court documents, by August 2009, when TBW failed, two of these investors held approximately $1.68 billion in Ocala Funding commercial paper that, in reality, was only collateralized by approximately $150 million in cash and mortgage loans. These investor banks were unable to redeem their commercial paper for full value.  The Department of Housing and Urban Development, Office of the Inspector General (“HUD-OIG”) estimated that the Department losses from the scheme — from payments that had to be made based on Federal Housing Administration guarantees — may be in excess of $3 billion; the FDIC estimated that depositor insurance fund losses from Colonial’s failure, to which the scheme contributed, will be approximately $2.8 billion.  On February 24, 2011, as a consequence of her role in the $1.9 billion scheme, Desiree Brown, former treasurer for TBW, pled guilty to conspiracy to commit bank, wire and securities fraud.  On March 2, 2011, as a consequence of her role in the $400 million scheme, Catherine Kissick, a former senior vice president of Colonial and head of its Mortgage Warehouse Lending Division, also pled guilty to conspiracy to commit bank, wire and securities fraud. On March 14, 2011, Raymond Bowman, the former TBW president, pled guilty to conspiring to commit bank, wire and securities fraud, and lying to SIGTARP and FBI agents about his role in a fraud scheme.  On March 16, 2011, Teresa Kelly, former operations supervisor in Colonial’s Mortgage Warehouse Lending Division pled guilty to conspiring to commit bank, wire and securities fraud. Colonial Bank, which had received conditional approval for TARP funding, received no funds following SIGTARP's notification to Treasury of this investigation.  This investigation is being worked by SIGTARP in partnership with the Criminal Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of Virginia, the FBI, FDIC-OIG, HUD-OIG, the Federal Housing Finance Agency Office of the Inspector General, the Internal Revenue Service, Criminal Investigation, and the FinCEN.  The investigation is ongoing.

SEC Press Release [PDF]

Lee Farkas Indictment Press Release:
http://www.justice.gov/opa/pr/2010/June/10-crm-703.html

Lee Farkas Indictment:
http://www.justice.gov/opa/documents/farkas-indictment.pdf

Desiree Brown Press Release:
http://www.justice.gov/criminal/vns/caseup/brownd.html

Desiree Brown Plea Agreement:
http://www.justice.gov/criminal/vns/docs/2011/feb/02-24-11brown-plea-agree.pdf

Catherine Kissick Press release:
http://www.justice.gov/criminal/vns/caseup/kissickc.html

Catherine Kissick Plea Agreement:
http://www.justice.gov/criminal/vns/docs/2011/mar/03-07-11kissick-plea-agree.pdf

Ray Bowman Press Release:
http://washingtondc.fbi.gov/dojpressrelpressrel11/wfo031411.htm

Ray Bowman Plea Agreement:
Ray Bowman Plea Agreement [PDF]

Theresa Kelly Press Release:
http://washingtondc.fbi.gov/dojpressrelpressrel11/wfo031611a.htm

Omni National Bank [+]

• Omni National Bank (“Omni”) was a national bank headquartered in Atlanta with branch offices in seven states. Omni failed and was taken over by the Federal Deposit Insurance Corporation (“FDIC”) on March 27, 2009. Before its failure, Omni had applied for, but did not receive, TARP funds under the Capital Purchase Program (“CPP”). SIGTARP has participated in several investigations concerning Omni that have led to criminal charges as part of a mortgage fraud task force that includes SIGTARP, the U.S. Attorney’s Office for the Northern District of Georgia, FDIC OIG, the Office of the Inspector General of the Department of Housing and Urban Development (“HUD OIG”), the U.S. Postal Inspection Service (“USPIS”), and the FBI. On January 14, 2010, Jeffrey Levine, Omni’s former Executive Vice President, pled guilty in Federal district court to charges of causing material overvaluations of bank assets in the books, reports, and statements of Omni. On March 23, 2010, Brent Merriell pled guilty in Federal district court to charges of making false statements to the FDIC and six counts of aggravated identity theft in connection with a scheme to prompt Omni to forgive $2.2 million in loans. Delroy Davy pled guilty on May 11, 2009, in Federal district court to charges of bank fraud and conspiracy. On April 1, 2010, Mark Anthony McBride was sentenced to 16 years in prison on charges of conspiracy to commit bank, mail, wire, and bankruptcy fraud. On January 5, 2011, Karim W. Lawrence, an officer and employee of Omni, pled guilty to charges of corruptly receiving commissions or gifts in exchange for procuring loans.  SIGTARP’s involvement in the investigations is ongoing.

Levine Plea Press Release:
http://www.justice.gov/usao/ganpress/2010/01-14-10c.pdf

Merriell Plea Press Release:
http://www.justice.gov/usao/ganpress/2010/03-23-10.pdf

McBride Sentencing Press Release:
http://www.justice.gov/usao/ganpress/2010/04-01-10.pdf

Merriell Sentencing Press Release:
http://www.justice.gov/usao/ganpress/2010/08-03-10.pdf

Brent Merriell Plea [PDF]
Delroy Davy Plea [PDF]
Jeffrey Levine Plea [PDF]
Mark McBride Plea [PDF]
Christopher Loving Plea [PDF]
Karim Lawrence Plea [PDF]

The Shmuckler Group, LLC [+]

• On November 18, 2010, Howard Shmuckler was arrested pursuant to a 30-count indictment obtained by the Prince George’s County State’s Attorney’s Office in Maryland. Shmuckler owned and operated Shmuckler Group, a company located in Vienna, Virginia, that purportedly offered mortgage modification services. He was charged with conspiracy, theft, and operating a business without a license, all relating to an alleged mortgage modification scam that took advantage of the publicity surrounding the TARP-supported HAMP program. According to a related cease and desist order issued by the Maryland Commissioner of Financial Regulation, Shmuckler, along with two other individuals and their affiliated companies, are alleged to have collected more than $1.2 million in upfront fees from 372 Maryland homeowners by falsely promising to persuade banks to modify the terms of the homeowners’ mortgages. According to the same order, Shmuckler contracted with Nova Key, LLC to market and sell Shmuckler Group loan modification services to homeowners, including advertising that targeted Spanish-speaking homeowners who had obtained subprime mortgages that they could not afford and who had fallen behind on their mortgage payments.  The order further alleges that: Shmuckler and his associates falsely promised to return upfront fees to homeowners for whom they failed to obtain modifications; falsely represented the progress of the homeowners’ loan modifications; and directed homeowners to stop making payments on their mortgage loans and not to contact their lenders. According to the order, many of these homeowners subsequently lost their homes to foreclosure. This case resulted from a joint investigation conducted by SIGTARP, the Office of the State’s Attorney for Prince George’s County, and the Maryland Department of Labor Licensing and Regulation’s Financial Regulation Division.

Howard Shmuckler indictment Press Release:
http://www.dllr.state.md.us/finance/ShmucklerIndicted.shtml

Residential Relief Foundation [+]

• On November 17, 2010, pursuant to court order, the FTC halted the operations of the Residential Relief Foundation and affiliated companies and individuals. This action, supported by SIGTARP’s investigative efforts, was based on a civil complaint filed by the FTC alleging that the defendants violated Federal law by falsely claiming that they would obtain loan modifications and significantly lower mortgage payments for consumers in return for upfront fees. The complaint also charges the defendants with misrepresenting an affiliation with the Federal Government, falsely claiming to have taken reasonable and appropriate measures to protect consumers’ personal information from unauthorized access, and improperly disposing of consumers’ information in unsecured dumpsters, in violation of the FTC Act. Specifically, the FTC complaint alleges that the defendants falsely claimed their loan modification program could result in waiver of late payments, late fees, and legal fees; conversion of adjustable rates to fixed rates as low as 1%; reduction of principal balances; and up to 40% lower mortgage payments. According to the FTC complaint, the Residential Relief Foundation used a logo similar to the Great Seal of the United States and told consumers that it is nearly impossible for homeowners to obtain mortgage modifications on their own. Claiming quick results and a high success rate, the defendants charged a $1,495 up-front fee, advised homeowners to stop making mortgage payments, and falsely claimed that reports the defendants created would enable homeowners to obtain the promised results, according to the complaint. In addition, the FTC charged that in marketing debt relief services for credit card debt, the defendants falsely told people they could become debt free in 12 to 36 months, remove late fees and penalties, and reduce debts up to 50%. At the FTC’s request, a Federal court ordered a halt to the operation, appointed a receiver, and froze the defendants’ assets, pending trial. The FTC action seeks to stop the defendants’ deceptive claims permanently and make them forfeit their ill-gotten gains. SIGTARP provided investigative support in furtherance of the FTC’s case. SIGTARP’s investigation is ongoing.

Temporary Restraining Order:
http://www.rrf-receiver.com/Documents/TRO.pdf

Receiver website:
http://www.rrf-receiver.com/

Goldwater Bank, N.A. [+]

• On September 15, 2010, Goldwater, located in Scottsdale, Arizona, entered into a settlement agreement with the U.S. Attorney’s Office for the Southern District of New York requiring it to forfeit $733,805 to resolve civil forfeiture claims related to Goldwater’s alleged laundering of illegal online gambling proceeds. Goldwater had received approximately $2.6 million from TARP through CPP. Between January and May 2009 more than $13.3 million in funds traceable to offshore online gambling companies were deposited in a bank account at Goldwater held by Allied Wallet, Inc. The forfeiture amount equaled the net income that Goldwater received to process these transactions. Additionally, in order to safeguard the Government’s continued TARP investment in the bank, Goldwater agreed to develop and implement internal anti-money laundering procedures, to comply with the Bank Secrecy Act, and to create internal training programs and an independent audit function to ensure that its compliance is effective. SIGTARP jointly investigated Goldwater with the FBI and the U. S. Attorney’s Office for the Southern District of New York.

Press Release:
http://www.justice.gov/usao/nyspressreleases/September10/goldwaterbankforfeiturepr.pdf

American Home Recovery [+]

• On August 11, 2010, the U.S. District Court for the Southern District of New York unsealed a grand jury indictment charging Jaime Cassuto, David Cassuto, and Isaak Khafizov, the principals of American Home Recovery, a mortgage modification company located in New York City, with one count of conspiracy to commit mail and wire fraud, one count of wire fraud, and two counts of mail fraud, all relating to a mortgage modification scam. The indictment also included a forfeiture allegation that would require forfeiture of proceeds obtained as a result of the offenses.  The defendants were arrested by Special Agents from SIGTARP and the FBI as part of the Department of Justice’s nationwide “Operation Stolen Dreams” mortgage fraud sweep. According to the indictment, the defendants perpetrated a scheme to defraud homeowners using mailings and telemarketing efforts. Through these channels, it is alleged that the defendants, through AHR, falsely promised to assist desperate homeowners by negotiating with banks to modify the terms of their mortgages in exchange for upfront fees of several thousand dollars. In fact, the indictment alleges, AHR did little or no work to modify the mortgages. Through their scheme, the defendants obtained more than $500,000 from homeowners throughout the country, according to the indictment. The indictment further alleges that one of the defendants, Khafizov, directed AHR salespeople to falsely inform prospective clients that AHR had an 80%-90% success rate in securing modification of clients’ mortgages and that AHR would issue a full refund of the upfront fee to any client whose mortgage was not successfully modified by AHR. In addition, it is charged that the AHR salespeople falsely represented to homeowners that AHR would ensure their participation in the TARP-funded Making Home Affordable (“MHA”) program. Finally, AHR salespeople falsely advised homeowners that they were more likely to obtain a mortgage modification from their bank if they fell further behind on their mortgage payments and/or stopped making payments to their bank entirely, and sent their money to AHR instead, the indictment alleges. The case is pending. This ongoing SIGTARP investigation is being conducted in partnership with the FBI and the U.S. Attorney’s Office for the Southern District of New York.

Nationwide Mortgage Fraud Sweep Press Release [PDF]

Nations Housing Modification Center [+]

• On March 19, 2010, Glenn Steven Rosofsky was arrested by agents from SIGTARP and the Internal Revenue Service, Criminal Investigation Division (“IRS-CI”) and charged by the U.S. Attorney’s Office for the Southern District of California with one count of conspiracy to commit wire fraud and money laundering and one count of money laundering. A separate information the same day charged Michael Trap with conspiracy to commit fraud and money laundering. As set forth in the charges, Rosofsky, Trap, and others operated a telemarketing firm, ostensibly to provide delinquent homeowners with loan modification services. Operating under the names “Nations Housing Modification Center” and “Federal Housing Modification Department,” Rosofsky and Trap took advantage of the publicity surrounding the Administration’s mortgage modification efforts under the TARP-supported Making Home Affordable (“MHA”) program and are alleged to have used fraudulent statements to induce customers to pay $2,500 - $3,000 each to purchase loan modification services that were not actually provided. The charges allege that the solicitation letters were mailed in envelopes that deceptively bore a Capitol Hill return address (in fact, it was merely a post office box) and were designed to mimic official Federal correspondence. Court documents allege that the fraud grossed $900,000. In March 2010, Trap pled guilty to conspiracy to commit mail fraud and money laundering.  In June 2010, Rosofsky pled guilty to offenses including money laundering, conspiracy to commit wire fraud, and filing a false tax return. On October 14, 2010, Roger Jones pled guilty for his role in the same advance-fee scheme to conspiracy to commit wire fraud. At his guilty plea, Jones admitted not only to participating in the conspiracy but also to making material false statements to SIGTARP agents that significantly obstructed or impeded an aspect of the SIGTARP investigation.

The criminal charges follow the September 16, 2009, civil injunction obtained by the Federal Trade Commission (“FTC”), in connection with an investigation conducted in partnership with SIGTARP, against Rosofsky, Trap, and others, alleging violations of the FTC Act and telemarketing sales rules through misrepresentations about their organization as a Federal Government agency or affiliate and false claims that they would obtain mortgage modifications for consumers for a fee. This case was jointly investigated with the Internal Revenue Service Criminal Investigation, the FTC, the San Diego District Attorney’s Office, and the United States Attorney’s Office for the Southern District of California, with the support of FinCEN and the New York High Intensity Financial Crime Area.

Rosofsky Plea Press Release:
http://www.justice.gov/usao/caspress/cas10-0601-Rosofsky.pdf


Rosofsky Sentencing Press Release:
http://www.justice.gov/usao/caspress/cas11-0124-Rosofsky.pdf

Glenn Rosofsky Plea [PDF]
Michael Trap Plea [PDF]
Roger Jones Plea [PDF]

The Park Avenue Bank [+]

• On March 15, 2010, Charles Antonucci, the former President and CEO of The Park Avenue Bank, was charged by the United States Attorney’s Office for the Southern District of New York. On October 8, 2010, he pled guilty in the U.S. District Court for the Southern District of New York to offenses including securities fraud, making false statements to bank regulators, bank bribery, and embezzlement of bank funds. In particular, Antonucci attempted to steal $11 million of TARP funds by, among other things, making fraudulent claims about the bank’s capital position. With his guilty plea, Antonucci became the first defendant convicted of attempting to steal from the taxpayers’ investment in TARP.   Antonucci falsely represented that he had personally invested $6.5 million in Park Avenue Bank to improve its capital position. As Antonucci admitted, however, the funds were actually borrowed from Park Avenue Bank itself and reinvested as part of an undisclosed “round-trip” transaction. This fraudulent transaction was touted by Park Avenue Bank in its application for TARP funds as evidence of its supposedly improving capital position, a key factor regulators considered when awarding TARP funds. In addition, Antonucci admitted to making false representations to bank regulators about the source of the $6.5 million. On January 4, 2011, Carlos Peralta pled guilty in the U.S. District Court for the Southern District of New York to wire fraud. Peralta participated in a fraudulent investment scheme through which he caused the pastors of a church in Coral Springs, Florida to wire $103,940 from a bank account in Florida to an account at Park Avenue Bank in Manhattan. The ongoing SIGTARP investigation is being conducted in partnership with the FBI, U.S. Immigration and Customs Enforcement (“ICE”), the New York State Banking Department Criminal Investigations Bureau, and the Office of the Inspector General for the Federal Deposit Insurance Corporation (“FDIC OIG”).

Antonucci Arrest Press Release:
http://www.justice.gov/usao/nyspressreleases/March10/antonuccicharlesarrestpr.pdf

Antonucci Plea Press Release:
http://www.justice.gov/usao/nyspressreleases/October10/antonuccicharlespleapr2.pdf

Charles Antonucci Indictment [PDF]
Carlos Peralta Indictment [PDF]

Mount Vernon Money Center [+]

• On March 11, 2010, Robert Egan, president, and Bernard McGarry, chief operating officer, of the Mount Vernon Money Center (“MVMC”) were indicted in the Southern District of New York on charges related to their theft of more than $50 million entrusted to MVMC.  On September 15, 2010, Egan pled guilty to conspiracy to commit bank fraud and wire fraud.  On October 13, 2010, McGarry pled guilty to the same offenses.  The guilty pleas arose from a scheme in which Egan and McGarry defrauded MVMC clients, including banks that had received TARP funds, out of more than $50 million that had been entrusted to MVMC.  MVMC engaged in various cash management businesses, including replenishing cash in more than 5,300 automated teller machines owned by financial institutions.  From 2005 through February 2010, Egan and McGarry solicited and collected hundreds of millions of dollars from MVMC’s clients on the false representations that they would not co-mingle clients’ funds or use the funds for purposes other than those specified in the various contracts with their clients.  Relying upon the continual influx of funds, Egan and McGarry misappropriated the clients’ funds for their and MVMC’s own use, to cover operating expenses of the MVMC operating entities, to repay prior obligations to clients, or for their own personal enrichment.  This case was jointly investigated by SIGTARP, the FBI and the U.S. Attorney’s Office for the Southern District of New York.

Egan/McGarry Indictment Press Release:
http://newyork.fbi.gov/dojpressrelpressrel10/nyfo031010.htm

Robert Egan Plea Press Release:
http://www.justice.gov/usao/nyspressreleases/September10/eganrobertpleapr.pdf

Bernard McGarry Plea Press Release:
http://www.justice.gov/usao/nyspressreleases/October10/mcgarrybernardpleapr.pdf

Egan/McGarry Indictment [PDF]
Robert Egan Consent Order [PDF]

United Law Group [+]

• On March 11, 2010, SIGTARP, along with the USPIS, FBI, ICE, and the Orange County District Attorney’s Office, executed a publicly filed search warrant obtained by the U.S. Attorney for the Central District of California at the offices of United Law Group, LLC (“ULG”) in Irvine, California. This investigation focuses on allegations that ULG, taking advantage of the climate created by the TARP-supported MHA programs, engaged in a mortgage modification advance fee scheme. The company allegedly charged struggling homeowners fees ranging from $1,500 to $12,000 without performing services while advising victims to stop paying their mortgages and terminate contact with their lenders. Many ULG customers subsequently lost their homes to foreclosure. On June 30, 2010, ULG filed for bankruptcy protection. On December 20, 2010, as a direct result of SIGTARP’s investigative efforts, the Honorable Robert Kwan, United States Bankruptcy Judge, issued a preliminary injunction assigning control of a bank account held by ULG containing client funds to ULG’s bankruptcy trustee. The bankruptcy trustee assigned to wind down the operations of ULG in Irvine, California, has seized substantial funds that will be disbursed as restitution to victims.  SIGTARP’s investigation with its law enforcement partners is ongoing.

Bank of America [+]

• On February 4, 2010, the New York Attorney General charged Bank of America Corporation (“Bank of America”), its former Chief Executive Officer Kenneth D. Lewis, and its former Chief Financial Officer Joseph L. Price with civil securities fraud. According to the allegations, in order to complete a merger between Bank of America and Merrill Lynch & Co., Inc. (“Merrill Lynch”), the defendants failed to disclose to shareholders spiraling losses at Merrill Lynch. Additionally, after the merger was approved, it is alleged that Bank of America made misrepresentations to the Federal Government in order to obtain tens of billions of dollars in TARP funds. The investigation was conducted jointly by the New York Attorney General’s Office and SIGTARP, and the case remains pending in New York state court. SIGTARP also assisted the Securities and Exchange Commission (“SEC”) with its Bank of America investigation. On February 22, 2010, the Honorable Jed S. Rakoff, United States District Judge for the Southern District of New York, approved a $150 million civil settlement between the SEC and Bank of America to settle all outstanding SEC actions against the firm. The court found that Bank of America failed to disclose adequately to its shareholders, prior to their approval of a merger with Merrill Lynch, the extent of additional material losses that Merrill Lynch had suffered. Additionally, the court found that the proxy statement sent to shareholders in November 2008 failed to disclose adequately Bank of America’s agreement to allow the payment of bonuses to Merrill Lynch employees prior to the merger. In addition to the $150 million payment, Bank of America also agreed to the following settlement requirements:
• Engaging an independent auditor to assess and report on the effectiveness of the company’s disclosure controls and procedures.
• Furnishing management certifications signed by the chief executive officer and chief financial officer with respect to proxy statements.
• Retaining disclosure counsel to the audit committee of the company’s board of directors.
• Adopting independence requirements beyond those already applicable for all members of the compensation committee of the company’s board of directors.
• Retaining an independent compensation consultant to the compensation committee.
• Implementing and disclosing written incentive compensation principles on the company’s website and providing the company’s shareholders with an advisory vote concerning any proposed changes to such principles.
• Providing the company’s shareholders with an annual “say on pay” advisory vote regarding the compensation of executives.

BofA Complaint [PDF]

BofA Press Release:
http://www.ag.ny.gov/media_center/2010/feb/feb04a_10.html

ProTrust Management, Inc. [+]

• On August 6, 2009, Gordon B. Grigg, a financial advisor and owner of ProTrust Management, Inc., formerly based in Franklin, Tennessee, was sentenced to serve a 10-year prison term after pleading guilty to four counts of mail fraud and four counts of wire fraud in the U.S. District Court for the Middle District of Tennessee. The charges stemmed from Grigg’s role in embezzling nearly $11 million from his investor clients through false statements, including claims that Grigg was making investments in fictional “TARP-guaranteed debt.” SIGTARP participated in the investigation of Grigg and supported the prosecution along with its law enforcement partners, the SEC, the FBI, USPIS, the Tennessee Department of Commerce and Insurance, and the Franklin, Tennessee, Police Department. The prosecution was handled by the United States Attorney’s Office for the Middle District of Tennessee.

Grigg Sentencing Press Release:
http://www.justice.gov/usao/tnmpress_releases/2009/8_6_09.html

Improper Use of “MakingHomeAffordable.gov” [+]

• Supporting FTC’s Action Enjoining Improper Use of “MakingHomeAffordable.gov” - On May 15, 2009, at the request of the Federal Trade Commission (“FTC”), a Federal district court issued an order to stop an Internet-based operation that pretended to operate “MakingHomeAffordable.gov,” the official website of the Federal MHA program for mortgage loan assistance. The FTC alleged that the defendants deceptively diverted consumers who searched online for the free Government assistance program to commercial websites that offer loan modification services for a fee. According to the FTC’s complaint, these commercial websites, which are not part of or affiliated with the U.S. Government, require consumers to enter personally identifying and confidential financial information. The operators of these websites either purport to offer loan modification services themselves or sell the personally identifying information to others.

Press Releases:
http://www.ftc.gov/opa/2009/07/homeafford.shtm
http://www.ftc.gov/opa/2010/06/loanmods.shtm

Permanent Injunction:
http://www.ftc.gov/os/caselist/0923147/100617mhacmpt.pdf

Additional Activities

• Rescue Fraud Working Group of the President's Financial Fraud Enforcement Task Force - SIGTARP co-chairs the Rescue Fraud Working Group of the Financial Fraud Enforcement Task Force. President Barack Obama established the government-wide task force to hold accountable those who helped cause the 2008 financial crisis as well as those who attempt to take advantage of economic recovery efforts.
  
  

• SIGTARP/CFPB/Treasury HAMP Mortgage Modification Task Force - SIGTARP has partnered with the Consumer Financial Protection Bureau and the U.S. Department of the Treasury to form a joint task force to combat scams that target homeowners seeking to apply for the Home Affordable Modification Program (HAMP). The task force issued a consumer fraud alert containing tips to help protect homeowners from HAMP-related mortgage modification scams. The fraud alert is provided directly to homeowners eligible to HAMP.
  
  

• TALF/PPIP Task Force - SIGTARP has organized a multi-agency task force to deter, detect, and investigate fraud or abuse in the TARP-funded Term Asset-Backed Securities Loan Facility (TALF) and the Public-Private Investment Program (PPIP). The TALF/PPIP Task Force is comprised of both civil and criminal law enforcement agencies who share expertise in securities fraud to deter potential criminals, to identify and stop fraud schemes before they fully develop, and to bring to justice those who seek to commit fraud through TALF or PPIP.

  In addition to SIGTARP, the TALF/PPIP Task Force consists of the Inspector General of the Board of Governors of the Federal Reserve System, FBI, Treasury’s Financial Crimes Enforcement Network, U.S. Immigration and Customs Enforcement, Internal Revenue Service Criminal Investigation Division, SEC, and the U.S. Postal Inspection Service.

  TALF Task Force Announcement

  TALF-PPIP Task Force Announcement

  
  
  

Last updated: December 19, 2011