LAS VEGAS -- Nevada's mortgage Fraud Task Force -- arguably among the most aggressive in the country -- has undergone some dramatic changes in the last few months.
The changes prompted its former chief to question whether those responsible for Nevada's housing collapse will ever be brought to justice.
John Kelleher and Attorney General Catherine Cortez-Masto express a mutual respect for one another, but they disagree about his recent resignation from the task force.
Since the task force's inception in 2007, the task force has served as a trailblazer for criminal prosecutions of housing-related crime.
Its developed a national reputation built on complex cases involving loan modification fraud, foreclosure scams and robosigning.
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"I'm proud of the work we did," said Kelleher, the former chief deputy attorney general. "I'm proud of the (attorney general) for taking the stand she did when she did."
Kelleher led the 23 person criminal unit until his unexpected transfer in March to a different division.
Cortez Masto ordered the move based on what she called a conflict of interest surrounding Kelleher's personal foreclosure crisis.
Shortly thereafter, he resigned.
"It's my personal opinion that there was some kind of deal cut, involving signing the multi-state (agreement) for whatever reason: financial, political, you can speculate all day long and back off criminal," he said. "That may not have been verbalized, but it's de facto what occurred."
Kelleher said he believes his reassignment, within two months of the national foreclosure settlement, set into motion a series of transfers and departures. Most of them were voluntary and involved other members of the task force, including three attorneys and two investigators.
To replace Kelleher, Cortez Masto selected Russell Smith, a former Humboldt County district attorney from rural Nevada.
"Our objective has always been to do our best with the little resources we had to prosecute who was responsible for this large scale mortgage fraud and foreclosure fraud in Nevada," Kelleher said. "We're ground zero. I don't see how that's going to get done now that pretty much everyone on my team is gone."
Cortez Masto disagreed with the characterization, chalking up the recent staffing changes to the usual ebb and flow in her office.
She that in no way does it signal a shift in her commitment to prosecute housing-related crime.
"I can't control the perception," she said. "The only thing I can tell you is, in this office, the mission is the same. We're still engaging in the same cases that we had in the past. Nothing's changed.
"We are still moving forward as part of our mission besides the mortgage settlement; there are a number of cases I can't talk about that we are investigating."
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According to statistics provided by her office, the number of active investigations has nearly doubled in the last six months. Four criminal cases were filed between December and May. (Initially this number was reported as nine. The Attorney General's Office later contacted 8 News NOW to report the number was actually four.)
Cortez Masto would not confirm whether banks would be prosecuted.
"The reason why I can't say that is because again, the facts and evidence will dictate where we go," she said. "If they take us in that direction, then yes. If they don't, they won't be."
Kelleher didn't hesitate to point fingers at bank officials and encouraged his successor to do something he now can't: Put some of them behind bars.
"We were never fool enough to think we would solve the problem," Kelleher said. "We can't change the world. But we thought we might be able to at least make a dent in our little corner of it. Whether that's going to happen remains to be seen."
Cortez Masto said the task force will remain a top priority and she's considering using monies from the national foreclosure settlement to add additional staff and resources.
