Fed and other agencies to join U.S. fraud task force
WASHINGTON (Reuters) - The U.S. government is beefing up a task force to fight mortgage crimes and safeguard federal financial bailouts, the U.S. Justice Department said on Tuesday.
The Federal Reserve, the internal watchdog of the new federal financial rescue program and four other agencies will join the presidential Corporate Fraud Task Force, which was established in 2002.
The move comes amid calls by some lawmakers and other critics for a more aggressive federal crackdown on allegations of financial wrongdoing that have sent Wall Street reeling.
Critics have called for a special task force to handle many cases now being handled by regional offices.
They have also urged stricter supervision of the Troubled Asset Relief Program, or TARP, which is in charge of handing out $700 billion to shore up financial and other institutions.
"The new member agencies represent a continuing focus by the task force to crack down on mortgage fraud, particularly with regard to ongoing investigations into securitization fraud," the Justice Department said.
In addition to the Fed -- the top U.S. banking regulator -- other new agencies on the task force include the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Department of Housing and Urban Development, and the TARP's special inspector general.
They will join senior officials from the FBI, U.S. Attorneys offices, the Securities and Exchange Commission and several other agencies.
The task force was expanded to bring "the most direct pipelines possible" to agencies involved in the fraud-scarred market sectors, said Gil Soffer, top aide to Deputy Attorney General Mark Filip, who heads the task force.
"The crisis hasn't gone away and it called for an expansion of the task force so that we can get our arms around it as fully and completely as possible."
The task force has won nearly 1,300 corporate fraud convictions since 2002, according to the Justice Department. The FBI said last fall it was investigating 24 cases of corporate fraud related to mortgage lending.
Working with the TARP inspector general, the task force will also investigate and prosecute any fraud related to the bailouts, Soffer told Reuters.
He said the cooperation would not be limited to mortgage related cases.
"The critical aspect of the TARP is that a lot of dollars are going to be leaving the federal fist," Soffer told Reuters. "We are really forging a close collaboration."
Soffer declined to say whether there was any wider federal investigation of potential "Ponzi" schemes following the arrest last month of Bernard Madoff on charges of conducting a fraudulent scheme that cost investors $50 billion.
(Editing by Eric Beech)
