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Federal officials have identified 10 states as mortgage fraud hotspots: California is one of them.
A new multi-agency mortgage fraud task force, called SCAM, was announced.
Arrests in Los Angeles could soon be under way like the scene in New York Thursday morning.
Former Bear Stearns executives Matthew Tannin and Ralph Cioffi are the first to face criminal charges related to the collapse of the subprime mortgage market.
They are accused of purposely lying to investors and lenders to inflate two funds they viewed as "toast" -- "toast" meaning on the verge of collapse. That cost investors a billion-and-a-half dollars in just two months.
"This case should send a strong message to all hedge-fund managers everywhere: In all dealings, in all communications with your investors, tell the truth," said Scott Friestad, Securities and Exchange Commission.
In a separate sweep, "Operation Malicious Mortgage" has led to the arrests of 406 people in a total of 144 cases across the country.
"Mortgage fraud poses a significant threat to our economy, to the stability of our nation's housing markets," said Mark Filip, Deputy U.S. Attorney General.
The FBI says mortgage fraud has cost victims more than a billion dollars.
"To those who would contemplate misleading, engaging in such schemes: You will spend time in jail," said FBI Director Robert Mueller.
In Los Angeles, the FBI office is investigating 100 open cases of mortgage fraud.
"Currently the Los Angeles field office receives more complaints than any other district in the United States regarding mortgage fraud," said FBI Special Agent Paul Bertrand.
Agent Paul Bertrand announced a new multi-agency task force called "SCAM," to step up enforcement. Agencies including the IRS and the Post Office, along with the U.S. Attorney, encouraging victims to report fraud right away.
"The message from the SCAM task force is that we are investigating mortgage in and around Los Angeles, and we do take it very seriously," said Agent Bertrand.
One of the most important mortgage scam tips: If it sounds too good to be true, it probably is.
To contact the SCAM task force tip line, call (866) 959-SCAM (7226).
