FBI launches IndyMac fraud investigation

18 July 2008

A fraud investigation into the failed bank IndyMac Bancorp, based in Pasadena, California, has been launched by the FBI.

The lender is one of 21 other mortgage companies being investigated for possible mortgage lending fraud related to at-risk subprime borrowers.

IndyMac was taken over by the Federal Deposit Insurance Corp (FDIC) last Friday, July 11th, with officials claiming that it appears the whole company rather than specific employees are under investigation, reports the Associated Press.

The bank was seized after regulators reached the conclusion that it was unlikely to be able to meet depositor withdrawal demands.

FBI special agent Richard Kolko said in a statement: "Given the volatility of today's subprime market, we have seen an increase in subprime-related complaints.

"To protect the integrity of our cases, we do not confirm or comment about specific companies that may or may not be a part of our investigations."

IndyMac, which has $32 billion in assets, is the fourth-largest financial institution ever to fail in the US.

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