Is Justice Department Coordinating Mortgage-Fraud Cases?


Congress is pressing federal law enforcement to prosecute financial executives who, by breaking the law, may have helped cause the global money meltdown, reports the Christian Science Monitor. The Securities and Exchange Commission already has under way more than 50 investigations into the subprime mortgage market. The FBI has 42 ongoing mortgage-fraud task forces. Actually locking up former Wall Street Masters of the Universe may be difficult. It’s not illegal to bankrupt your company by making bad business bets.

It appears the Department of Justice does not have a central effort to coordinate investigations related to problems caused by toxic mortgage-backed loans. U.S.attorneys are proceeding on their own. Jeffrey Sullivan, the U.S. Attorney in Seattle, is probing the September collapse of the Seattle-based Washington Mutual. U.S. attorneys in New York City and in New Jersey are looking at possible criminal executive actions at Lehman Brothers prior to its bankruptcy. Will anyone be convicted in conjunction with the current meltdown – as Enron executives Kenneth Lay and Jeffrey Skilling were in 2006, after their energy trading firm’s collapse? “It’s possible that could happen. But it depends on facts that we don’t yet know – many of which will be contested in court,” says law Prof. Carl Tobias of the University of Richmond.


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