Prometheus 6

U.S. Said to Open Criminal Inquiry of Countrywide.
By RAYMOND HERNANDEZ

WASHINGTON — Federal agencies have opened a criminal inquiry into Countrywide Financial for suspected securities fraud as part of the continuing fallout over the mortgage crisis, government officials with knowledge of the case said on Saturday.

The Justice Department and the Federal Bureau of Investigation are looking at whether officials at Countrywide, the nation’s largest mortgage lender, misrepresented its financial condition and the soundness of its loans in security filings, the officials said.

The investigation — first reported on Saturday in The Wall Street Journal — is at an early stage, said the officials, who spoke on the condition of anonymity because they were not authorized to discuss ongoing criminal matters. It is unclear whether anyone will ultimately be charged with a crime.

Richard Kolko, a spokesman for the F.B.I., declined on Saturday to confirm whether the agency had started an investigation of Countrywide related to its securities filings.

A Countrywide spokeswoman, Susan Martin, said, “We are not aware of any such investigation.”

The inquiry comes as the F.B.I. investigates 14 companies as part of a wide-ranging review of business practices in the troubled mortgage industry.

In that broader investigation, the F.B.I. is looking into possible accounting fraud, insider trading or other violations in connection with loans made to borrowers with weak, or subprime, credit.