IndyMac under FBI scrutiny

The FBI is investigating failed bank IndyMac Bancorp Inc. for possible fraud, an official said Wednesday.

It was not immediately clear how long the FBI's probe has been ongoing – or whether it was opened before Friday's takeover of IndyMac by the Federal Deposit Insurance Corp.

The investigation appears to be focused on the company and not individuals who ran it, a law enforcement official told The Associated Press. The official spoke on the condition of anonymity because he was not authorized to speak publicly about the investigation.

IndyMac Bank's assets were seized by federal regulators after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures.

The bank is the largest regulated thrift to fail in the last 20 years, regulators said.

Across the country, reports of mortgage fraud have soared over the past year as the subprime mortgage market collapsed, and defaults and foreclosures soared.

IndyMac's operations were transferred to the FDIC because bank regulators did not think the lender could meet its depositors' demands. The FDIC is now running the bank under the name IndyMac Federal Bank, FSB.

FDIC spokesman David Barr declined comment Wednesday.

It's unclear what penalties IndyMac could face now that it has been taken over by the FDIC. Generally, companies guilty of illegal activity can face civil charges and be forced to pay sanctions. In some cases, investigations that uncover new information can lead to focusing on new targets – like individuals. But it's unknown whether the FBI's case against IndyMac will do so, or how it could pursue charges against a now-defunct corporation.

Over the last year, and faced with a cratering housing market, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors.

Countrywide Financial Corp., formerly the nation's largest mortgage lender and now owned by Charlotte-based Bank of America Corp., is also under scrutiny.

Additionally, two former Bear Stearns managers were indicted last month on conspiracy and securities and wire fraud charges alleging they lied to investors in a hedge fund that tanked last year as the subprime market collapsed. Those charges marked the first criminal charges to arise on Wall Street from the subprime mortgage debacle.

In all, the FBI is now investigating 21 companies tied to the subprime mortgage crisis, up from 19 last month. Authorities are looking into at least 1,400 mortgage fraud cases nationwide, and more than 400 real estate industry players have been indicted since March.

FBI Director Robert Mueller has said the investigations focus on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments. Losses to homeowners and other borrowers are estimated at over $1 billion.