Published March 16, 2011
FBI Director Robert Mueller defended on Wednesday the Obama administration's efforts to prosecute Wall Street executives responsible for the U.S. mortgage meltdown amid criticism from some lawmakers that not enough has been done.
The agency has more than 3,000 open investigations into mortgage fraud alone, with 94 task forces and some 340 agents assigned, Mueller told the House of Representatives' Judiciary Committee.
Michigan Representative John Conyers, the committee's top Democrat, questioned whether the FBI was responsible for the lack of prosecutions related to financial and mortgage fraud and if anyone has been held responsible for the meltdown.
"I would have to strongly disagree with that portrayal of our efforts," Mueller said. "We have had takedowns about every six months, persons arrested for mortgage fraud, securities fraud, corporate fraud. There are ongoing trials in that arena."
He said there are 667 ongoing probes into corporate fraud by some 110 FBI agents. More than 55 are related to the subprime mortgage industry and "most of these cases are on Wall Street," Mueller said.
As for securities fraud, there are about 1,700 open cases with 233 agents, he said.
The Obama administration has brought few cases accusing senior executives at major companies tied to the housing and financial industry of fraud, and in some cases has found it has no support for criminal charges.
Last month federal prosecutors shelved a criminal investigation into the former chief executive of Countrywide Financial, Angelo Mozilo, after determining his actions in the mortgage meltdown did not amount to criminal wrongdoing.
However, Lee Farkas, the former chairman of one of the biggest mortgage firms, Taylor, Bean & Whitaker, is due to go on trial next month in a federal court in Virginia for a fraud scheme that involved losses of some $1.9 billion. The firm went bankrupt and contributed to the downfall of a major U.S. bank.
Democratic Representative Maxine Waters of California also complained to Mueller about a lack of prosecutions of those involved in servicing mortgages or the major banks who issued the home loans.
"I appreciate the fact that you have indicated that you have all these investigations going on and these agents, special task forces, but this has been going on since 2004," Waters said. "Nobody is going to jail; nobody has been identified as the major player in all of this."
Mueller said there are pending investigations into the mortgage servicers but declined to provide details in a public session of the committee. "We do have open investigations," he said.