FBI's Mueller Says Subprime Fraud Probe May Lead to Hedge Funds

[maddezmom]

FBI's Mueller Says Subprime Fraud Probe May Lead to Hedge Funds

By Robert Schmidt

April 17 (Bloomberg) -- FBI Director Robert Mueller said the agency's investigations into the subprime loan meltdown may uncover financial crimes committed by hedge funds and private equity firms.

Federal Bureau of Investigation agents have opened 19 criminal probes of companies in connection with the lending crisis, focusing on accounting fraud, insider trading and allegations of deceptive sales practices. Mueller, speaking today to an American Bar Association group in Washington, said he expects more to come as housing prices continue to fall.

``These investigations may well lead to other instances of fraud, from investment banks and private equity firms to hedge funds,'' Mueller said. ``We do not take these investigations lightly.''

The collapse in the credit markets has shaken Wall Street and forced people from their homes. Mueller told Congress yesterday that the FBI has seen a ``tremendous surge'' in fraud cases related to subprime loans, which are made to borrowers with poor credit.

more:http://www.bloomberg.com/apps/news?pid=20601103&sid=a8ULA6kmvOAA

[KSinTX]

1. If I could rec this a hundred times I would! n/t

[flashl]

2. Finally, they are looking in the right direction. nt

[jonrgrover]

3. Too Much Deficit

The problem is deficit spending. Every president and every congress since Johnson (Except Clinton 2nd term and the republicans) have raised the deficit and spending. I once graphed the budget and revenue and noticed that each year's revenue would have covered the previous year's spending but not the current year.