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A Federal Mortgage Fraud Prosecution in Hindsight, Part 1

Even compared to a 4,600 mile run across the Sahara Desert, 21 months in a federal prison was a harsh punishment for one man who recently completed his sentence. This man served the sentence after his epic desert run to raise awareness for clean water projects in Africa attracted the attention of a determined IRS agent.

That agent mounted a persistent investigation that ultimately uncovered some evidence of what the government deemed mortgage fraud. This man received several so-called "liar loans" - a breed of mortgage that large lenders and brokers commonly used before the 2008 mortgage crisis. Compared with the man's 21-month sentence, his broker served only 10 months in prison and the lender bank paid no penalties at all.

After spending 111 days running 4,600 miles across the Sahara Desert, averaging 50 miles per day without any rest days, the man appeared on Jay Leno's late night television show. His interview tried to focus public attention on water shortage crises in Africa - but an IRS agent focused on something else. The agent wondered how the man could afford to train for an arduous 111 day run while still earning a living.

Check back later for more coverage on how the television appearance triggered a massive investigation, complete with undercover agents and surveillance.

Source: NBC News, "Borrower targeted for mortgage fraud, while bankers got bailouts," Sopan Deb, Nov. 14, 2012

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