Money | 09/24/2008 8:30 am
FBI Investigates Bailed Out Financial Firms for Possible Mortgage Fraud

The FBI is investigating Fannie Mae, Freddie Mac, Lehman Brothers and AIG — and their executives — as part of a probe into possible mortgage fraud, multiple news sources reported Wednesday.
FBI spokesman Special Agent Richard Kelko told CNN that 26 firms were currently under investigation as part of the bureau’s general mortgage fraud inquiry.
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Earlier this month, FBI director Robert Mueller told Congress that 1,400 individual real-estate lenders, brokers and appraisers, along with two dozen corporations, are under scrutiny. CNN previously reported that Countrywide is also part of the investigation.
The Wall Street Journal reports that the U.S. Attorney in Brooklyn, NY, has brought charges against brokers who allegedly tricked some institutional investors into buying risky auction-rate securities.
The Washington Post, meanwhile, reports that the Securities and Exchange Commission has opened more than 50 investigations into disclosure and valuation of housing-related investments at banks, insurers and credit-rating agencies, agency Chairman Christopher Cox told the Senate Banking Committee Tuesday. Several lawyers warned that the probe into the complex world of mortgages could surpass the five-year Enron investigation.
Over the past year as the subprime mortgage debacle unraveled, the FBI began investigating a number of wide-ranging companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors. Mueller has previously said the agency’s focus in the nation’s subprime mortgage crisis focused on accounting fraud, insider trading and failure to disclose the value of mortgage-related securities and other investments.
Sources told CNN that the probes of Fannie, Freddie, Lehman and AIG are believed to be in the early stages. One source said the government would be "remiss" if it didn’t take a close look at what happened at these firms.























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