Surprise! DoJ's mortgage-fraud prosecutions claim turns out to be ... fraudulent

Bloomberg News caught the Department of Justice in a particularly noteworthy Friday-night news dump over the weekend.  The Obama administration, stung by accusations from the Left that it hadn’t gone after fraudulent mortgages and the lenders that helped fuel the bubble, claimed that a year-long initiative run by the Mortgage Fraud Working Group in the DoJ had charged 530 people who had victimized 73,000 people.  When Bloomberg’s reporters began digging into the claim, the DoJ stonewalled — and then finally admitted it cooked the books themselves:

The Justice Department made a long-overdue disclosure late Friday: Last year when U.S. Attorney General Eric Holder boasted about the successes that a high-profile task force racked up pursuing mortgage fraud, the numbers he trumpeted were grossly overstated.

We’re not talking small differences here. Originally the Justice Department said 530 people were charged criminally as part of a year-long initiative by the multi-agency Mortgage Fraud Working Group. It now says the actual figure was 107 — or 80 percent less. Holder originally said the defendants had victimized more than 73,000 American homeowners. That number was revised to 17,185, while estimates of homeowner losses associated with the frauds dropped to $95 million from $1 billion.

Hey, they only inflated those claims by 80% and 9o% — or looking at it from the other direction, 500% and 900%.  Shouldn’t they get a chance to round up to the nearest 1000%?  If you’re wondering what prompted this sudden outbreak of honesty, Bloomberg explains that two of its reporters had figured out the fraud:

The government restated the statistics because it got caught red-handed by a couple of nosy reporters. Last October, two days after Holder first publicized the numbers, Phil Mattingly and Tom Schoenberg of Bloomberg News broke the story that some of the cases included in the Justice Department’s tally occurred before the initiative began in October 2011. At least one was filed more than two years before President Barack Obama took office.

Jonathan Weil then played phone- and e-mail-tag with the DoJ spokesperson for a month, who promised Weil a list of those charged with fraud under the MFWG project.  And promised. And promised.  Instead, Weil wrote a column blasting Justice for stonewalling him.

The DoJ has finally corrected the record — late on a Friday, when few press outlets were around to note it.  As it turns out, the original figure included people prosecuted or just sentenced in the same fiscal year, even though they had been charged with crimes long before the MFWG came into being.  The victims were not limited to distressed homeowners, as the DoJ had originally claimed, and as Eric Holder himself bragged.

This isn’t the first time Holder has been caught cooking the books, Weil reminds us:

This was the second time, mind you, that Holder’s Justice Department had pulled a stunt like this. In December 2010, Holder held a press conference to tout a supposed sweep by the president’s Financial Fraud Enforcement Task Force called “Operation Broken Trust.” (The mortgage-fraud program was part of the same task force.) As with the mortgage-fraud initiative, Broken Trust wasn’t actually a sweep. All the Justice Department did was lump together a bunch of small-fry, penny-ante fraud cases that had nothing to do with one another. Then it held a press gathering.

At least on that occasion, the Justice Department promptly provided me with a list of the defendants’ names and case details when I asked for them. That is how I was able to determine for a December 2010 column that the government’s Broken Trust numbers were inflated. Among the handful of cases on the list that I spot-checked, one defendant was sentenced to probation before the operation’s supposed start date. Another person on the list had no record of criminal charges. Other cases had nothing to do with any actions by the task force. The Justice Department still hasn’t restated the Broken Trust numbers — even though those statistics clearly were in error, too.

And people wonder why no one trusts government. Remember when Democrats and the media got so exercised about politicization at the Department of Justice when President Bush asked six political appointees in the US Attorney corps to resign?  Good times, good times.