Indictments for First Time Home Buyer Fraud

The Globe reported today that the US Attorney's Office in Boston has announced the indictment of 14 individuals for fraudulently claiming the first time home buyer tax credit that pumped some much needed energy into the housing market last year. Several of those indicted paid for home purchases but recruited others who had never previously owned homes to become the owners of record to qualify for the tax credit. Another individual, an IRS employee, is alleged to have claimed the credit for claiming to have bought his house in 2008 when he had actually bought it in 2007. A representative of the Inspector General of the IRS acknowledged that something like $26 million in first time home buyer credits were erroneously or fraudulently claimed, but that indictments like these prove that “Congress created and modified the home buyer credit to stimulate and help taxpayers achieve the American Dream, not to line the pockets of wrongdoers."

While I'm pleased that people who improperly claimed this tax credit are being found-out, my sense of equity says that hauling a few dozen people who wrongly or erroneously claimed a maximum $8000 credit into US District Court on criminal indictments is a bit of overkill coming from a government that has so infrequently prosecuted those whose recklessness and complicity in fraudulent behavior cost the tax payers of America hundreds of billions of dollars in bailouts of so many financial institutions.