FBI Starts Probe Of Bailed Out Companies For Possible Fraud
September 24, 2008 7:43 a.m. EST
Washington, D.C. (AHN) - The U.S. Federal Bureau of Investigation has started a preliminary investigation into possible fraud involving the four bailed out firms, namely Freddie Mac, Fannie Mae, Lehman Brothers and the American International Group.
The four are among 26 companies under FBI review for possible accounting misstatements, Bloomberg quoted an unidentified FBI official as saying. The bureau has been under pressure to probe further into the companies seen as responsible for the worst financial crisis to hit Wall Street since the Great Depression.
According to Bloomberg, the spokespersons of Freddie Mac, AIG and Lehman declined to comment, while Fannie Mae's spokesman was not available for comment.
The two largest mortgage firms and AIG had already amended their book of accounts and corrected accounting mistakes in billions of dollars. Fannie Mae also paid a $400million fine to the Securities and Exchange Commission for hiding $10.3 billion in losses from 2002 to 2004 and maximizing bonuses. Freddie Mac was penalized $125 million in 2003 and restated earnings from 2000 to 2002.
The spokesman of the Department of Justice, Brian Roehrkasse, declined to confirm which companies are being investigated by the FBI. "As part of our investigative responsibility, the FBI conducts corporate fraud investigations... The number of cases fluctuates over time. However, we do not discuss which companies may or may not be the subject of an investigation," Roehrkasse explained to the New York Times.