As we have discussed before, government authorities at both the state and federal level have been getting increasingly aggressive in their mortgage fraud enforcement. This can sometimes lead authorities to use new tools in their pursuit of this type of fraud. Recently, New York City began using a new tool in its mortgage fraud enforcement.
The new tool in question is a computer program. The program will reportedly look through the city's public property database for indicators of potential fraudulent activity. Specifically, the program will be looking at things like a property's sale and transaction history. The program will then flag anything that it finds suspicious. Law enforcement officials will be notified of anything the program flags.
While this specific program is only being instituted in New York City, similar programs could someday be implemented and used by other states or the federal government. Also, programs like this could be used in the enforcement of crimes other than mortgage fraud. For instance, the U.S. Treasury Department uses a similar program in its enforcement against money laundering. Thus, it is worth looking at this program's potential effects.
This computer program could result in more people being arrested for and charged with mortgage fraud. This is because the program could direct law enforcement attention towards individuals who otherwise wouldn't have been suspected of any illegal activity. This could expose more people to the potential consequences that go along with facing criminal charges.
This increase could be a very negative thing if the computer program has any accuracy problems when it identifies "suspicious" activities. For instance, if the program mistakenly flags perfectly legal conduct, it could expose innocent people to police investigations and the possibility of facing criminal charges. Thus, this program could raise some concerns.
Source: The New York Times, "City to Battle Mortgage Fraud With Computer Alert," Cara Buckley, 2 Feb 2011