WASHINGTON (MarketWatch) -- More than 400 defendants were charged by federal prosecutors Thursday in connection with alleged mortgage fraud over schemes carried out since March, said to have resulted in about $1 billion in losses.
In a probe over three and a half months, dubbed Operation Malicious Mortgage, the Justice Department and the Federal Bureau of Investigation uncovered 144 mortgage-fraud cases. U.S. authorities arrested 60 people on Wednesday alone in 15 districts around the country.
The announcement comes at the same time that the Justice Department indicted two former Bear Stearns hedge-fund managers on criminal charges related to the subprime-mortgage market.
"Operation Malicious Mortgage and our other mortgage-related enforcement actions demonstrate the Justice Department's commitment and determination to combat these criminal schemes, hold their perpetrators accountable and help restore stability and confidence in our housing and credit markets," Deputy U.S. Attorney General Mark Filip said.
The multiagency operation primarily went after lending fraud, foreclosure-rescue scams and mortgage-related bankruptcy schemes.
FBI Director Robert Mueller said that this agency will continue to direct resources toward combating both mortgage fraud and corporate-securities fraud.
Reports of mortgage fraud have been on the rise over the past year, following the implosion of the subprime-mortgage market.
The two former Bear Stearns managers were charged in a nine-count indictment Thursday alleging wire fraud, conspiracy and securities fraud. Prosecutors said that they misled investors about the rapidly tanking value of the two funds, which had invested heavily in subprime mortgages.
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