Fraud pursuit by Claudia Sonea

On Tuesday the FBI officials made public the fact that they opened criminal investigations into 14 corporations as part of a crackdown on improper subprime lending. The probes involved potential violations, including accounting fraud and insider trading and also reached across the industry to include developers, subprime lenders, companies that securitized loans and investment banks that held them, according to Neil Power, head of the FBI's economic crimes unit. The 14 cases refer to individual loans that have also risen sharply in a crackdown on subprime lending irregularities. Furthermore, Sharon Ormsby, head of the FBI's financial crimes section, reveals the fact that next year is expected for the mortgage corporate fraud potential cases to increase due to another wave of adjustable rate mortgages that will most likely reset. In parallel with FBI's investigation, the Securities and Exchange Commission has opened about three dozen civil investigations into the subprime market collapse and some of the probes overlap. If FBI has not revealed any of the corporations, SEC probe include Swiss bank UBS AG (UBSN.VX) and U.S investment banks Morgan Stanley (MS.N), Merrill Lynch (MER.N), Bear Stearns (BSC.N), as well as bond insurer MBIA (MBI.N). The SEC, which has formed an internal subprime mortgage task force, will analyze the way financial firms priced mortgage-based securities and if it was necessary for investors to be announced earlier about the declining value of those securities. A criminal investigation into two mortgage-related hedge funds at Bear Stearns that collapsed during the summer was launched by the U.S. attorney in Brooklyn, New York and the FBI. About 1,200 active cases, up 40 percent from 2006, with 321 criminal complaints or indictments are on the FBI's list, officials said. Indeed there are some loan cases referring to individuals lying to qualify for mortgages, but mostly 80 percent of the cases involved fraud for profit. California, Texas, Arizona, Florida, and the Midwest, are the areas where fraud has been remarked as being frequent.

related story: http://news.yahoo.com/s/nm/20080129/bs_nm/subprime_crime_dc;_ylt=AllKuVX_I2X6Ft50JC3O7eas0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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