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with crimes ranging from mortgage fraud to money laundering, according to a release from the Justice Department in October. The new indictment brings the total number of defendants to 81. A federal indictment unsealed in late October charges the 17 defendants with a number of crimes stemming from their alleged involvement in a criminal organization simply called the "Enterprise." The group, which operated principally out of Charlotte and Waxhaw, North Carolina, allegedly stole more than $75 million from investors and mortgage lenders. The 81 defendants believed to have been involved with the Enterprise face a number of charges, including investment fraud, mortgage fraud, bank fraud, money laundering, and distribution of illegal drugs. According to allegations in the indictment, several of the defendants also bribed bank officials and committed perjury before a grand jury. The Enterprise's mortgage fraud scheme involved acquiring luxury homes in neighborhoods in Charlotte and Waxhaw. According to the indictment, one member of the group would agree with a builder to purchase a property at the "true price," making arrangements for a buyer to purchase the property at an inflated price. In most circumstances, the buyer would agree to purchase the property in his or her own name in exchange for a kickback. The builder would sell the property at the inflated price, the lender would make a mortgage loan based on that price, and the difference between the inflated price and the true price would go to the Enterprise, the indictment says. The indictment alleges that the Enterprise funded its mortgage fraud operation through a series of investment scams that defrauded more than 50 investors out of more than $27 million. STAT INSIGHT 717 Number of active permanent HAMP modifications in Asheville, North Carolina as of September. Source: The U.S. Treasury 118 The indictment is just the latest in a series of criminal charges resulting from Operation Wax House, a mortgage fraud investigation that began in North Carolina in 2007. The list of defendants investigated and indicted in the operation includes attorneys and paralegals, bank insiders, builders and sellers, facilitators and financiers, buyers, real estate agents, and promoters, according to the Justice Department. BofA Faces Lawsuit from Justice Department, Fair Housing Complaint from NFHA The U.S. Department of Justice sued Bank of America (BofA) for more than $1 billion for alleged mortgage fraud related to the sale of loans to Fannie Mae and Freddie Mac, Manhattan U.S. Attorney Preet Bharara announced in late October. According to Bharara, the civil fraud suit is a first for the Justice Department for mortgage loans sold to the GSEs. The lawsuit stems from the origination practices of Countrywide, which North Carolina-based Bank of America acquired in 2008. According to the complaint, from 2007 to 2009, Countrywide implemented a loan process called the "Hustle," which pushed loans through the origination process by eliminating quality checkpoints and by compensating employees based on the volume of loans originated. For example, the complaint stated Countrywide eliminated the use of an underwriter for many high risk loans and instead used loan processors who previously weren't even qualified to answer borrower questions. The complaint further alleges Countrywide informed Fannie Mae and Freddie Mac that it had actually tightened its underwriting guidelines during this time. As a result, the complaint stated thousands of defective loans were sold to Fannie Mae and Freddie Mac, resulting in over $1 billion in losses and loans that went into default. "For the sixth time in less than 18 months, this office has been compelled to sue a major U.S. bank for reckless mortgage practices in the lead-up to the financial crisis," Bharara said. In the civil mortgage fraud suit against BofA, both the Federal Housing Finance Agency and the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) signed on as co-plaintiffs. Bank of America spokesmen Lawrence Grayson said the bank "has stepped up and acted responsibly to resolve legacy mortgage matters. The claim that we have failed to repurchase loans from Fannie Mae is simply false." Grayson added, "At some point, Bank of America can't be expected to compensate every entity that claims losses that actually were caused by the economic downturn." In a separate action, the National Fair Housing Alliance (NFHA) filed a federal housing discrimination complaint with HUD against Bank of America, alleging discrimination in how REO properties are marketed and maintained by the bank in three metros: Chicago, Milwaukee, and Indianapolis. The most recent complaint is part of an amended complaint previously filed. In September, NFHA announced it filed a federal housing discrimination complaint against the bank after evaluating REO maintenance in eight metros: Atlanta, Dallas, Dayton, Grand Rapids, Miami/Fort Lauderdale, Oakland/Richmond/Concord, Phoenix, and Washington, D.C. In early October, another complaint was filed based on investigations in Orlando and Charleston. The latest complaint, filed in late October, brings the total number of cities in question to 13. After conducting investigations across the United States the organization alleges BofA has demonstrated a practice of neglect when maintaining and marketing REOs in black and Hispanic communities while maintaining and marketing REO properties in a "far superior" manner in predominantly white communities. For example, in a release, the organization alleges that in Indianapolis, 71 percent of all BofA REOs in communities of color had substantial amounts of trash as well as 52 percent in Chicago and 33 percent in Milwaukee. In April 2012, NFHA also filed HUD complaints against Wells Fargo and U.S. Bancorp. In September, BofA denied the allegations in a statement. "While we share NFHA's concern about neighborhoods, we strongly deny their allegations and stand behind our property maintenance and marketing practices," said Jumana Bauwens, a spokeswomen for the bank. "Bank of America is committed to stabilizing and revitalizing communities that have been impacted by the economic downturn, foreclosures, and property abandonment."

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