THE HEAT COMES DOWN

Will the FBI also go after Moody's, Standard & Poor and Fitch?

FBI investigating 14 companies for mortgage fraud
updated 7:01 p.m. EST, Tue January 29, 2008


WASHINGTON (CNN) -- Complaints about potential mortgage fraud are up during the subprime mortgage crisis, and the FBI has opened criminal investigations of 14 companies related to subprime mortgage loans, the agency said Tuesday.

Neil Power, chief of the FBI economic crimes unit, attributed the increase "to good old-fashioned greed."

"On insider trading, we're looking in some cases at whether executives were aware that the value of their holdings would be going down and the executives traded on that information," said Power.

"On accounting fraud, we're looking at housing developers who may have reported cash reserve accounts to reflect falsely inflated values," he told CNN.

Power and other senior officials said the number of suspicious activity reports they review for potential investigation skyrocketed from 3,000 in fiscal year 2003 to about 35,000 in 2006, to 48,000 in 2007. And in the first quarter of fiscal year 2008, Power said, officials have already received 15,000 such reports, putting them on pace to receive 60,000 complaints this year.