Justice Dept. Opens Fannie Criminal Probe

Reuters ^ | Thursday September 30, 9:16 am ET | Reuters

[AdamSelene235]

NEW YORK (Reuters) - The Justice Department has opened an investigation of possible accounting fraud at Fannie Mae, the Wall Street Journal reported on Thursday, after a federal regulator said the mortgage giant may have manipulated its earnings targets.

The Journal reported that the investigation is still in the preliminary stages. Fannie has been under fire since the Office of Federal Housing Enterprise Oversight, or Ofheo, accused the company of improper accounting that allowed senior executives to pocket multimillion-dollar bonuses.

According to the newspaper, officials have said that some Fannie Mae executives may have misled regulators, which in some cases would be an added criminal offense. Because of the nature of Ofheo's disclosures, the Justice Department concluded that it demanded an investigation, the Journal added.

Ofheo referred its report to prosecutors last week, lawyers close to the case told the Journal.

The regulator's report raised questions of possible accounting manipulations involving financial instruments used to hedge risk, and expensing of costs associated with the company's core business of buying home mortgages from lenders around the country.

No one was immediately available at Fannie Mae or the Justice Department to comment on Thursday.

[Dubya]

Good post.

here is another one.

Fannie Mae Criminal Probe Launched

[mickie]

Good letter.....I'm going to copy it and send it out in the morning.

[piasa]

fyi

[Fedora]

If this turns out to be linked to the Oil for Food probe, it could be called Oil for Fannies! :)

[piasa]

The Coppertone Scandal?

[Moonman62]

Represenative Baker put it best when he recently stated, "The most disgusting revelation is that accounting tricks were used by a government-chartered enterprise with a government-sponsored public mission and a government-bestowed massive subsidy purely for personal gain and to pad executive compensation," Rep. Richard Baker (R., La.)

Why is that disgusting or even surprising? The federal government, especially Congress has been the leader in accounting tricks for decades.

[Fedora]

LOL!

[Cogadh na Sith]

Now that's a funny headline!

[mabelkitty]

Justice to Probe Fannie Mae

would have been much better ; )

[Not A Snowbird]

Interesting title for this article. Hmmm. Fannie probes... yuk.

[jriemer]

Nice going........Gorelick and the FM crowd need to be placed under the microscope for those illegal big-buck bonuses.

Grampadave - Gorelick almost needs her own "downside list" run by Alamo-girl at the going rate. Pick a political scandal and she's at the epicenter - not even one degree of seperation away from the "hot zone of controversy".

[Alamo-Girl]

Indeed. She is stacking up quite a record. Thanks for the ping!

[Liz]

Gorelick and her ilk prove you don't get far in Dim branded politics unless you can get low down and dirty, and are willing to steal from taxpayers. If you don't muck up somewhere, the Dims don't want you around.

[jriemer]

Gorelick and her ilk prove you don't get far in Dim branded politics unless you can get low down and dirty, and are willing to steal from taxpayers. If you don't muck up somewhere, the Dims don't want you around.

She must be carrying some good leverage considering that she has been in the middle of some good stink through the years and still on this side of the dirt.