Firms Suspected of Financial Fraud

Several major financial institutions at the center of this month’s economic turmoil are likely to be investigated by the FBI, according to The International Herald Tribune.

An anonymous U.S. government official referenced Fannie Mae, Freddie Mac, Lehman Brothers and American International Group as prominent candidates for federal fraud investigators. Each of these companies has played an integral part in the housing, credit and financial crisis which has swept across this nation during the past year.

What began as a simple decline in over-inflated home values spread quickly to the banking and investment sectors. To shore themselves up against further collapse, these institutions – and likely others as well – may have engaged in unethical or illegal practices. FBI director Robert Mueller recently told the Senate Judiciary Committee that the Bureau was stepping up its corporate investigations, in hopes of finding companies which “may have engaged in misstatements” during the financial crisis.

In addition to the major corporate cases – of which the FBI has 26 active files – the Bureau is also conducting open investigations of up to 1,400 smaller companies and individuals suspected of engaging in mortgage related fraud.

The American taxpayers have been hung out to dry by giant corporations and the government. It would be welcome relief if the FBI’s investigation turned up real results. Fannie Mae and Freddie Mac controlled a massive and important chunk of America’s home mortgages. Their mismanagement, combined with their predatory and subprime lending practices, was a major factor in the collapse of the housing market during the past year. Lehman Brothers engaged in tax evasion for years, funneling hundreds of millions of dollars to overseas investors. Now it seems that each was also actively engaged in defrauding the government.

With Henry “the Hammer” Paulson offering billions to Fannie Mae and Freddie Mac, a number which could surpass $200 billion, and the Federal Reserve offering another $85 billion to AIG - this nation is now providing financial support to companies suspected of fraudulent practices.

Our government is actively propping up companies that openly evaded its laws and regulations, ranging from dividend taxes to mortgage authorizations. In the last few weeks we have offered nearly $1 trillion taxpayer dollars in an attempt to rescue the very companies which put us in this economic mess. The American people deserve better, they deserve justice; we can only hope to receive a bit of either.

Source International Herald Tribune:

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