FBI sets up mortgage fraud team, uses wiretaps

A recently created FBI team is setting priorities on mortgage fraud investigations, and the bureau is using undercover operations, wiretaps and computer technology to get evidence of economic crimes, the agency's chief said on Wednesday.

FBI Director Robert Mueller told a House Judiciary Committee hearing that the agency in December created the National Mortgage Fraud Team at headquarters to assist field offices in their pending investigations.

In his prepared remarks submitted to the committee and in his actual comments, Mueller said the team also is helping to identify the worst mortgage fraud perpetrators and to evaluate where additional FBI employees are needed.

The FBI's mortgage fraud caseload has tripled in the past three years to more than 2,400 cases, Mueller said.

In addition, the FBI has more than 560 open corporate fraud investigations, including matters directly related to the current financial crisis, he said. The FBI has declined to identify any companies under criminal investigation.

Mueller said the FBI has found new ways to detect and combat mortgage fraud.

One example involved a national FBI initiative that uses statistical correlations and advanced computer technology to search for companies and individuals with patterns of property flipping, he said.

"In addition, sophisticated investigative techniques, such as undercover operations and wiretaps, not only result in the collection of valuable evidence, they provide an opportunity to apprehend criminals in the commission of their crimes, thus reducing loss to individuals and financial institutions," he said.

Mueller said he met last week with Mary Schapiro, the head of the U.S. Securities and Exchange Commission, so that the two agencies could better coordinate investigations.

The two agencies have been investigating allegations of financial statement manipulation, accounting fraud and insider trading that contributed to the current economic crisis.