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FBI probe into US mortgage dealers
Bill Condie24 Sep 2008
The FBI is investigating four of the companies at the centre of the US financial meltdown for possible mortgage fraud.
The probe covers mortgage guarantee firms Fannie Mae and Freddie Mac, insurer American International Group and investment bank Lehman Brothers - and their bosses.
Federal agents are trying to establish whether the businesses broke rules by providing "misinformation" while lending to so-called "sub-prime" borrowers, according to a report on CNN.
A spokesman for the agency said the FBI is looking at 26 cases of potential corporate fraud related to the collapse of the US mortgage lending industry.
FBI Director Robert Mueller told the US Congress a week ago that 24 cases of potential corporate fraud were under investigation.
In testimony before the House of Representatives Judiciary Committee, the FBI chief also vowed to pursue corporate executives if necessary.
Mueller said the FBI was looking at all aspects of the mortgage market. With respect to the corporate probes, which could result in federal charges, he said "the allegations would be there were misstatements of assets".
Mueller has previously said the FBI's hunt for culprits in the US sub-prime mortgage crisis was focused on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments.
US Justice Department spokesman Brian Roehrkasse said: "As part of our investigative responsibility, the FBI conducts corporate fraud investigations. However we do not discuss which companies may or may not be the subject of an investigation."
The investigations were revealed as the Bush administration stepped up its efforts to persuade Congress to back its $700 billion bank bail-out plan. Many leading American politicians - Democrat and Republican - have complained that the scheme throws a lifeline to the bankers who lent imprudently while saddling the taxpayer with a massive burden that will inevitably lead to public spending cuts.
The Bush administration took control of Fannie Mae and Freddie Mac earlier this month after the companies' values plummeted. The two firms are central to the mortgage market, owning or guaranteeing nearly half of US home loans.
Lehman Brothers filed for bankruptcy last week after the government refused to bail it out and the next day the government seized control of AIG.
