Lack of Resources, Communication Displaced Fraud Investigations

January 29, 2009


As early as 2004, an official from the Federal Bureau of Investigation gave Congress an ominous prediction of a mortgage meltdown that would affect financial markets. The current Assistant Director for the agency said the FBI has made good strides.

Resources used to investigate mortgage fraud crimes, however, had been diverted to counterterrorism, leaving departments lacking. In addition, the FBI agency said it never received tips it needed from the banking regulatory agencies. A retired FBI official said the Securities and Exchange Commission, the Office of Thrift Supervision and the Office of the Comptroller of the Currency failed to detect the securities issues.

Current Assistant Director Ken Kaiser said the FBI’s Criminal Division has arrested 1,000 suspects and targeted 180 criminals relating to the collapse of credit in the housing market, adding, “But the FBI is a law enforcement and intelligence agency, we are not banking regulators."

Read story at Seattle PI