Just saw this hitting the internets and figured it was something worth paying attention to, especially as the end of the economic world as we know it is starting to look more like one big attempt at cleaning out taxpayer coffers before Senor Arbusto and his pals leave the office of the Presidency.
From the Vancouver Sun:
A federal law enforcement official confirmed the FBI is now looking at 26 cases of potential corporate fraud related to the collapse of the U.S. mortgage lending industry.
Here it comes, people. Bailout, schmailout, this is Enron all over.
You might have seen Inky99's excellent find in a Ben Stein column this morning that suggests this entire bailout might have been the punchline on one giant plan to get paid on the front and back end of a few years of bad deals...
The profit can be wildly out of proportion to the real amount of defaults, because speculators can push down the price of instruments tied to the subprime mortgages far beyond what the real rates of loss have been. As I said, the profits here can be beyond imagining. (In fact, they can be so large that one might well wonder if the whole subprime fiasco was not set up just to allow speculators to profit wildly on its collapse...)
...and now we have news that the feds are investigating these firms for fraud?
But hey, maybe it's just a 'few bad apples', right?
Umm, no.
The FBI is investigating Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc. and insurer American International Group Inc. and their senior executives for potential mortgage fraud
That's pretty much everyone.
In testimony before the House Judiciary Committee, the FBI chief [Robert Mueller] also vowed to pursue corporate executives if necessary in mortgage fraud cases. Mueller said the FBI was looking at all levels of the mortgage systems. With respect to the corporate probes, which could result in federal charges, "the allegations would be there were misstatements of assets," he said.
This story is developing by the minute. I'll update as I find more, but for now, here's a first person take on the raping of America by Wall Street, from a guy who owned a bank or two.
UPDATE: Story is now confirmed by the US Justice Department, though they won't say who is being investigated.
"As part of our investigative responsibility, the FBI conducts corporate fraud investigations. The number of cases fluctuates over time, however we do not discuss which companies may or may not be the subject of an investigation," said Justice Department spokesman Brian Roehrkasse.
UPDATE II: RobertInWisconsin diaried about this a bit earlier, so check that out for more info.