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FBI to probe 4 firms for fraud

The FBI, under pressure to look at possible criminal activity in the financial markets, is expanding its corporate fraud inquiries in the wake of the tumult in the last 10 days, officials said.

business Updated: Sep 24, 2008 22:19 IST
Eric Lichtblau

The Federal Bureau of Investigation (FBI), under pressure to look at possible criminal activity in the financial markets, is expanding its corporate fraud inquiries in the wake of the tumult in the last 10 days, officials said on Tuesday.

The FBI has now opened preliminary investigations into possible fraud involving the four giant corporations at the centre of the recent turmoil — Fannie Mae and Freddie Mac, Lehman Brothers and the American International Group.

A government official, speaking on condition of anonymity, said it was “logical to assume” that those four companies would come under investigation because of the many questions surrounding their recent collapse.

FBI officials said that the total number of corporate fraud investigations at the bureau was 26, an increase from the 24 open cases cited just a week ago by Robert S Mueller III, director of the FBI.

That number stood at 21 as recently as July, but the bureau has not named most of the targets.

Mueller told members of the senate judiciary committee that the major corporate investigations are aimed at companies that “may have engaged in misstatements in the course of what transpired during this financial crisis.” In addition to the major corporate cases, the bureau said it had about 1,400 open investigations into smaller companies and individuals suspected of mortgage fraud.