Wall Street, lenders face new subprime probe, WSJ reports

[Eugene]

Source: Reuters

Wall Street, lenders face new subprime probe, WSJ reports
Sun May 4, 2008 10:55pm EDT

NEW YORK (Reuters) - Prosecutors in the Eastern
District of New York in Brooklyn are stepping up
their scrutiny of players in the subprime-mortgage
crisis, focusing on Wall Street firms and mortgage
lenders, the Wall Street Journal said on its Web
site on Sunday.

A task force of federal, state and local agencies
will look into potential crimes ranging from
mortgage fraud by brokers to securities fraud,
insider trading and accounting fraud, the Journal
said.

The Federal Bureau of Investigation is already
targeting major corporate insiders and criminal
groups in its investigation of fraud in the
mortgage lending industry. The FBI has said it
is investigating 19 companies in mortgage cases.

The formation of the task force amplifies efforts
already under way in Brooklyn, where prosecutors
are investigating whether investment bank UBS AG
(UBSN.VX) improperly valued its mortgage-
securities holdings, the report said.

-snip-

Read more: http://www.reuters.com/article/ousiv/idUSN0433728120080505

[stanley01]

1. Even the absence of Eliot Spitzer

Even the absence of Eliot Spitzer cannot stop an investigation
that re-pubs thought would be over with his downfall. 

[maddezmom]

2. FBI, federal prosecutors lining up mortgage fraud indictments

FBI, federal prosecutors lining up mortgage fraud indictments

The FBI’s top agent in Springfield said he expects months of mortgage fraud investigations spearheaded by the bureau’s local office to result in federal grand jury indictments later this year.
Agent: Schemes used cooked appraisals and multiple participants to defraud lenders
By Matt Wagner
Springfield Business Journal Staff
5/5/2008
The FBI’s top agent in Springfield said he expects months of mortgage fraud investigations spearheaded by the bureau’s local office to result in federal grand jury indictments later this year.

Supervisory Special Agent Dean C. Bryant said the FBI’s extensive probe into the alleged schemes – first reported by Springfield Business Journal in February 2007 – has turned up evidence that individuals from various real-estate sectors conspired to defraud lenders by inflating the value of area homes.

“I will tell you that some of the cases certainly involve tens of millions of dollars,” Bryant said. “So there’s a lot of money involved, and we’re aggressively pursuing the investigations – obviously, because of the heartache and stress it’s put on all these homeowners.”

Bryant said the FBI has worked closely with the Internal Revenue Service and U.S. Attorney’s Office on the investigations, which gained significant momentum early last year. The local emphasis on mortgage fraud reflects a national crackdown by the U.S. Attorney General’s Office, he added.

more:http://www.sbj.net/article.asp?aID=7463517.1360416.1053637.7045883.4280863.407&aID2=81040