FBI: Corporate crooks took millions as economy failed

The FBI is investigating more than 500 cases of corporate fraud amid the financial meltdown, it revealed today.

And the bureau is tackling an even bigger mountain of mortgage fraud cases in which hundreds of millions of dollars may have been swindled from the system.

FBI Deputy Director John Pistole told the Senate Judiciary Committee on there were 530 active corporate fraud investigations, and 38 of them involve some of the biggest names in corporate finance in cases directly related to the current economic crisis.

The FBI also has more than 1,800 mortgage fraud investigations, more than double the number of just two years ago.

There are so many mortgage fraud cases to investigate, he said, that the bureau is not focusing on individual purchasers, but industry professionals generating fraud schemes that could total hundreds of millions of dollars.

“It is a matter of lawyers, brokers or real estate professionals that are systematically trying to defraud the system,” Mr Pistole said.

Agents have even seen some instances of organised crime getting involved in mortgage fraud, he said.

Senate Democrats are urging more spending to expand the ranks of the FBI’s financial fraud investigators.

After the 2001 terror attacks, about 2,000 FBI agents were moved to counter-terrorism work, and Mr Pistole said he was considering moving some of them back to anti-fraud efforts.

Senate Judiciary Committee Chairman Patrick Leahy urged the FBI and the Justice Department to put people who have committed mortgage fraud behind bars.

“Most people are honest,” Mr Leahy said. “The ones who are not honest in this field are creating economic havoc and I want to make sure that we’re able to go after them.

“I want to see people prosecuted.... Frankly, I want to see them go to jail,” he said.